The Merchants' Nat. Bank of St. Louis v. Sells

• Decision Date: 14 November 1876
• Citation: 3 Mo.App. 85
• Parties: THE MERCHANTS' NATIONAL BANK OF ST. LOUIS, Plaintiff in Error, v. LUKE SELLS, Defendant in Error.
• Court: Missouri Court of Appeals

3 Mo.App. 85

THE MERCHANTS' NATIONAL BANK OF ST. LOUIS, Plaintiff in Error, v. LUKE SELLS, Defendant in Error.

Court of Appeals of Missouri, St. Louis.

November 14, 1876

1. The M. N. Bank received a dispatch from another bank requesting the payment of $500 to J. H. B. A person called upon L. S introduced himself as J. H. B., and asked to be identified at the M. N. Bank. L. S. recognized him as a person whom he had met at W. as an employee of the mercantile house of M. &amp W., but did not recollect his name, and this person exhibited to him what purported to be a dispatch addressed to J. H. B which stated that the M. N. Bank would pay him $500 whereupon L. S. sent his bookkeeper to the bank to identify him as J. H. B. The bank paid him the money. He was not J. H. B. L. S. had no interest in the matter. The M. N. Bank sued L. S. for the recovery of the $500. Held, that upon these facts the bank was not entitled to recover of L. S.

2. If a person states what he knows to be untrue, or makes an assertion as to the truth or falsity of which he knows nothing whatever, and so induces another to act to his prejudice, a fraud, in law, is committed; but, though the representation made is false, if the person making it had reason to, and did, believe it true, he has incurred no liability, for he has been guilty of no deceit, and the gist of the action is fraud.

ERROR to St. Louis Circuit Court.

Affirmed.

Noble & Orrick, for plaintiff in error, cited: Watson v. McD., 19 Wend. 557; Foote v. Newland, 21 Wend. 94; 42 Barb. 18; 47 Barb. 206; Barker v. Scudder, 56 Mo. 272; 2 Allen 490; 46 Mo. 374; Bennett v. Johnson, 21 N.Y. 238; Harding v. Randall, 15 Me. 332; Hammett v. Emmerson, 27 Me. 308; Cabot v. Christie, 42 Vt. 121; Fisher v. Mellon, 103 Mass. 503; Sharpe v. Mayor of New York, 40 Barb. 257; Litchfield v. Hutchinson, 117 Mass. 195; Reeves v. Larkin, 19 Mo. 192; Morgan v. Cox, 22 Mo. 373; DeGrex v. Small, 321; Home v. Bigland, Law Rep. 9 Ex. 724; Ormrod v. Huth, 14 Mee. & W. 651; Haycraft v. Creasy, 2 East, 92.

Hitchcock, Lubke & Player, for defendant in error, cited: Wag. Stat. 657, sec. 7; Taylor v. Zepp, 14 Mo. 482; Newman v. Hook, 37 Mo. 213; Dazzell v. Odell, 3 Hill 219; Add. on Torts, 4th Eng. ed., 1005, 1006; Hill on Torts, 34, sec. 28; Russell v. Clark, 7 Cranch 70; Lord v. Goddard, 13 How. 198; Stone v. Denny, 4 Metc. 151; Ormrod v. Huth, 14 Mee. & W. 651; Haycraft v. Creasy, 2 East, 92; Mahurin v. Harding, 8 N.H. 131, and cases cited; Hearne v. Waterhouse, 39 Mo. 97.

OPINION

BAKEWELL J.

This cause comes to this court on writ of error, sued out by the Merchants' National Bank, seeking a reversal of the judgment rendered in favor of defendant Sells, upon an agreed case under the statute for the submission of controversies without action. The agreed case is as follows:

" The plaintiff, being then and now still a corporation, duly incorporated under the National Bank Act of the United States, on the 19th day of May, A. D. 1874, at its banking-house in the city of St. Louis, received of the Fourth National Bank of Nashville, Tennessee, a genuine dispatch, of which the following is a true copy:

‘ R. Eagle, Cash. Mchts. Nat. Bk., St. Louis:

Pay J. H. Britton, Southern Hotel, five hundred dollars and ch'ge our acc.

JNO. PORTERFIELD, Cash. '

After the receipt by plaintiff of this dispatch, and on the 19th day of May, A. D. 1874, a person claiming to be the J. H. Britton named in said dispatch called at said banking-house, and requested of the teller payment of the $500, at the same time exhibiting a telegram purporting to have been sent to J. H. Britton by said Fourth National Bank of Nashville, Tennessee, and stating in substance that plaintiff would pay him $500. In reply to this request the teller informed the person so claiming to be J. H. Britton, that he could get the money as soon as he was properly identified, and asked him whether he was not acquainted with some one in the city of St. Louis; to which the person answered yes, that he thought Sells & Co. might identify him; whereupon he was told by the teller that identification by the house of Sells & Co. would be satisfactory. The person then left the bank and went to defendant's store, and found defendant, Luke Sells, in his office. Defendant was then, and now still is, engaged in the produce and commission business, in the city of St. Louis, under the name of Sells & Co. Upon meeting defendant, said person introduced himself, and defendant recognized him as a person whom he had met at Winterville, Mississippi, as an employee in the house of Moor & Winters, in the spring of 1873, but, being unable to recollect his name, the person showed him the telegram above referred to, and requested defendant to identify him at the plaintiff's banking-house. Defendant had no interest whatever in said person, nor was he in any manner concerned in the $500 in question, but, believing said person to be the J. H. Britton, defendant requested his book-keeper, Wm. H. Goodin, to go with said person to the plaintiff's banking-house to identify said person. Thereupon said person and said Goodin went to plaintiff's banking-house, and said Goodin stated to plaintiff's teller that he had been sent by Mr. Sells, the defendant, to state: ‘ This is Mr. J. H. Britton; it is all right; he knows him.’ Relying upon this identification, the plaintiff paid said person so identified the $500, receiving from said person a draft, of which the following is a true copy, with the indorsements thereon

‘ $500. St. Louis, 19th May, 1874.

At sight, pay to the order of Mch'ts National Bank, five hundred dollars, value received.

JAS. H. BRITTON.

To Fourth Natn'l Bank, Nashville, Tenn. '

Endorsed, ‘ Pay Jno. Porterfield, Cash., or order.’

Which draft was executed by said person, immediately after said identification, in the presence of said teller.

J. H. Britton was a stranger to, and not a customer of, the plaintiff. Upon presentation of this draft it was dishonored, and it turned out that the said person was not J. H. Britton, and not entitled to said money, but that he was another and different person, bearing no such name. He having disappeared, the $500 was lost to plaintiff, and plaintiff, on the 29th day of May, 1874, notified defendant of this loss, and demanded payment of the $500 from him, which defendant refused. Plaintiff, upon these facts, claims judgment against defendant for said $500 and interest thereon at 6 per cent. per annum from the said 29th day of May, 1874. Defendant claims that, having acted in good faith, executed no guaranty, and received no compensation or reward in the premises, he is not liable upon the case so stated."

The St. Louis Circuit Court, on May, 17, 1875, heard and took this controversy under advisement until June 25, 1875, following, and then declared the law to be " that, upon the facts as set forth in the agreement of the parties constituting this case, the defendant is not legally liable to plaintiff, and defendant is entitled to a judgment in his favor; " and judgment was rendered accordingly for the defendant.

Plaintiff having saved all exceptions, the cause is brought here by writ of error.

It is clear that the defendant here made no express promise that he would make good the representation of this pretended J. H. Britton that he was the person named in the dispatch to the bank. He is not liable as guarantor in the sense that he undertook to make good any agreement of the pretended Britton; such a contract is within the statute of frauds. He is not liable on a verbal contract as a promisor, for it cannot be said that in consideration that the bank would advance $500 to this impostor he expressly agreed to refund the money to the bank if he should turn out not to be J. H. Britton. If there were any such understanding between Sells and the bank, at the time, it cannot be doubted that Sells would have been required to indorse the draft which the bank required the impostor to make at the time he received the money.

It is said that there is an estoppel in pais. What is it that Mr. Sells is estopped to deny? It is the bank that asserts that this impostor was not J. H. Britton. Mr. Sells said he was Britton. It is clear that Mr. Sells would be glad to maintain the entire truth of this statement; unhappily this cannot be done.

If the bank has any ground of action against Sells, arising out of the transaction detailed in the agreed statement, it can only be an action for deceit by false and fraudulent representations. In such an action a scienter must be alleged. The petition would not state facts sufficient to constitute a cause of action unless it said that the defendant made certain representations knowing them to be false. On the trial it would be sufficient to show, in that respect, either that the defendant knew that this impostor was not Britton, or else that the defendant knew nothing whatever on the subject. Either state of facts would sustain the allegation, because it would be as much a falsehood and a fraud to induce another to pay out money on a statement that a man known to the speaker to be John Smith is John Brown, as to say that a man is named John Brown whom the speaker never saw before, and as to whose name he has no knowledge or information of any sort whatever. It is quite clear that, if a total stranger should meet a merchant and say, " My name is John Brown; I wish to be identified in bank," the falsehood would be as complete, if the merchant should say to the teller, " I know this man to be John Brown," as if the merchant actually knew him to be John Smith. But, if upon the trial it should appear that the defendant had himself been imposed upon, that he had some reason, though an insufficient one, to believe the...