Securities Inv. Co. v. International Shoe Co.

• Decision Date: 01 May 1928
• Docket Number: No. 19710.,19710.
• Citation: 5 S.W.2d 682
• Parties: SECURITIES INV. CO. OF ST. LOUIS v. INTERNATIONAL SHOE CO.
• Court: Missouri Court of Appeals

5 S.W.2d 682

SECURITIES INV. CO. OF ST. LOUIS v. INTERNATIONAL SHOE CO.

No. 19710.

St. Louis Court of Appeals. Missouri.

May 1, 1928.

Rehearing Denied May 15, 1928.

Appeal from St. Louis Circuit Court; John W. Calhoun, Judge.

"Not to be officially published."

Action by the Securities Investment Company of St. Louis against the International Shoe Company. Judgment for defendant, and plaintiff appeals. Affirmed.

Jones, Hocker, Sullivan & Angert, of St. Louis, for appellant.

Cobbs, Logan & Alexander, of St. Louis, for respondent.

BENNICK, C.

This action was brought by plaintiff, Securities Investment Company of St. Louis, assignee of the T. F. Moore-Clark Company, to recover the amount of an indebtedness on account alleged to be due from defendant. The case was tried to a jury, resulting in a verdict for defendant; and, from the judgment rendered, plaintiff, after a denial of its motion for a new trial, has duly appealed.

The petition was in two counts, alleging, in substance, that the T. F. Moore-Clark Company had represented to plaintiff that it was the owner of two accounts against defendant, each in the sum of $1,312.50, growing out of the sale of certain merchandise by such company to defendant; that plaintiff thereupon had made inquiry of the defendant relative to said alleged accounts, and had made known to defendant its intention to purchase the same, provided defendant would acknowledge liability thereon; that, in response to such inquiry, defendant had represented to plaintiff that such accounts existed between it and the T. F. Moore-Clark Company, and that an assignment to plaintiff of said accounts would be accepted by defendant; that plaintiff, relying upon said representation and promise so made to it by defendant, and, being persuaded and induced thereby, did, for value received, purchase said accounts; that the same were past due and unpaid; and that defendant had refused to pay the same, or any part thereof, although repeated demands had been made upon it by plaintiff to make payment in accordance with its promise and agreement so to do.

The answer to each count of the petition was a general denial, coupled with a plea: First, that the defendant was not indebted to the T. F. Moore-Clark Company, and that no account existed between the two, because the merchandise mentioned in the accounts had never been delivered, which fact the plaintiff knew, or could have ascertained by the exercise of ordinary diligence at the time it purchased the accounts; and, second, that the alleged agreement of defendant to honor the assignment had been secured by the fraudulent misrepresentation of plaintiff's agent, Charles T. Clark, that the merchandise was ready for delivery to defendant.

The reply was in the usual form.

Plaintiff, as its name implies, is an investment company, dealing in installment notes, accounts, and real estate mortgages. With regard to the pertinent facts of the case at hand, it appears that on December 19, 1923, Mr. Charles T. Clark, president of the T. F. Moore-Clark Company, a concern engaged in the business of manufacturing signs for advertising purposes, called at the office of Mr. Charles H. Schrieber, treasurer of plaintiff company, and proposed the sale to plaintiff of certain alleged accounts held by his company against defendant. Meeting with no success in effecting a sale on his first visit, Clark called again at noon on the following day, and at that time obtained Schrieber's agreement that he would purchase the accounts, provided Clark would secure a letter of guaranty from defendant. Schrieber thereupon drew up a memorandum, embodying his idea of the type of letter of guaranty or acceptance required, which he gave to Clark, telling him to take the same to Mr. Barnett, advertising manager for defendant, and procure such a letter from him.

Clark immediately called upon Barnett and informed him that the signs theretofore ordered by defendant from the T. F. Moore-Clark Company were completed and ready for delivery to defendant, except for the addition of the dealers' names. He also advised Barnett of his negotiations with plaintiff relative to the assignment of the accounts in question, and called his attention to the memorandum which had been drawn by Schrieber. Barnett thereupon handed the memorandum to his stenographer to be copied verbatim on one of defendant's letterheads, and, when the same had been transcribed, affixed his signature thereto. This letter, omitting salutation and signature, follows:

"We have received notice from the T. F. Moore-Clark Company of their assignment to you of all of their interest in two invoices for 250 Red Goose signs each purchased by this company.

"These invoices are dated Dec. 18, 1923, terms 30 days, 2 per cent. cash on one, and 60 days, 2 per cent. cash on the other.

"We will follow the instructions of the T. F. Moore-Clark Co. and remit to you the amount involved in accordance with their assignment."

About 2 o'clock in the afternoon, Clark returned to Schrieber's office with the above letter in his possession, upon receipt of which plaintiff purchased the accounts for 80 per cent. of their face value and issued its check to Clark in payment therefor. The sale having been consummated, Schrieber at once wrote defendant, inclosing purported copies of invoices, and asking whether the merchandise represented thereby had been received and accepted by defendant as plaintiff had been informed. On the following morning, as soon as he had received such communication, Barnett called Schrieber over the telephone and informed him that none of the signs had been delivered. The fact of the matter is that no delivery was ever made to defendant, and that the T. F. Moore-Clark Company had failed in business, Clark himself having absconded as soon as the transaction involved herein had been terminated. Upon the receipt of such information from Barnett, plaintiff notified its bank, but was unsuccessful in its endeavor to stop payment on the check to Clark.

Barnett testified that it was wholly in reliance upon Clark's representation that the signs were ready for delivery that he had signed the so-called letter of guaranty, and that if Clark had not made such representation he would not have signed the same.

The first point urged for reversal is that the court erred in refusing, at the close of the whole case, to instruct the jury peremptorily to find for plaintiff upon both counts of the petition. Inasmuch as the determination of the propriety of the court's denial of such request is largely decisive of the case as a whole, a somewhat extended discussion of the rights and liabilities of the respective parties, passing as incidents to the assignment in question, will be unavoidable.

In looking to a solution of the legal problem thus submitted, we begin with the major premise that ordinarily the assignee acquires, as against the debtor, whatever rights the assignor was entitled to assert against the debtor at the time the assignment became effective as to the latter— that is, at the time of notice to him of such assignment. However, it is equally true, and it must be equally appreciated, that the assignee acquires no greater rights against the debtor than the assignor had against him at such time. United Shoe Machinery Co. v. Ramlose, 210 Mo. 631, 109 S. W. 567; Chouteau v. Allen, 70 Mo. 290, 342; Bobb v. Taylor, 56 Mo. 311; Archer v. Merchants' & Manufacturers' Ins. Co., 43 Mo. 434; Ford, Adm'r, v. O'Donnell, 40 Mo. App. 51; 5 C. J. 961 et seq.

Taking such broad statement of the law as fully recognized by all the authorities, and having regard for the fact that the accounts in question purported to represent an indebtedness of defendant to the T. F. Moore-Clark Company for signs for advertisement purposes ordered by the former from the latter, and that such signs had concededly not been delivered to defendant, either at the time the assignment was made, or subsequently thereto, it would follow without question that defendant was not liable, were it not for the so-called letter of guaranty or acceptance of the assignment, given by defendant at plaintiff's request, upon the construction of which the ultimate result to be reached in this case hinges. We say this for the reason that the general rule, that the assignee acquires no greater rights against the debtor than the assignor possessed, is subject to the qualification that the debtor may by his representations or conduct estop himself to interpose against the assignee such defenses as would have been otherwise available to him against the assignor. 5 C. J. 966.

Passing, therefore, to a consideration of the letter in question, we take the rule to be well accepted that, where the language used in a writing is clear and unambiguous, no resort may be had to the extrinsic facts and circumstances surrounding it on the ground of aiding in its construction, but that, where the meaning of the parties is uncertain from the words used, and it is not within the power of the court to ascertain the intent by reference solely to the body of the instrument itself, evidence of the acts and conduct of the parties prior to, contemporaneous with and subsequent to the execution of the instrument, may properly be considered as an aid in arriving at the correct interpretation to be put upon the language actually used. Sebastian County Coal & Mining Co. v. Mayer, 310 Mo. 104, 274 S. W. 770; City of California v. Burke, 292 Mo. 466, 239 S. W. 830; Interior Linseed Co. v. Becker-Moore Paint Co., 273 Mo. 433, 202 S. W. 566; Willson v. Chicago Bonding & Surety Co. (Mo. Sup.) 214 S. W. 371; 22 C. J. 1179 et seq.

Consequently, it becomes incumbent upon us to consider, in the first instance, whether the letter written by defendant may fairly be said to have been ambiguous on its face; and, secondly, whether the attendant facts and circumstances, and the acts and conduct of the parties, as shown in the evidence,...