Theusen v. Bryan

• Decision Date: 12 April 1901
• Citation: 85 N.W. 802,113 Iowa 496
• Parties: THEUSEN v. BRYAN ET AL.
• Court: Iowa Supreme Court

113 Iowa 496

85 N.W. 802

THEUSEN

v.BRYAN ET AL.

Supreme Court of Iowa.

April 12, 1901.

Appeal from district court, Grundy county; F. C. Platt, Judge.

Action to recover the value of certain live stock sold and delivered by plaintiff and one Moag to defendant W. R. Bryan. There was a trial to a jury, resulting in a verdict and judgment for plaintiff against defendants Stewart, Moeler, and Porter, and they appeal. Reversed.R. J. Williamson and Boies & Boies, for appellants.

Mullan & Pickett, J. C. Scott, H. C. Hemenway, and A. Grundy, for appellee.

DEEMER, J.

Prior to the transactions complained of in this case, defendant Bryan and one Morrison were engaged in the business of buying and shipping live stock under the firm name of Bryan & Morrison. This firm had contracted a large indebtedness to Ingwerson & Smith, commission men in the city of Chicago, and at the time of the dissolution of the firm was practically insolvent. Bryan, however, desired to continue in business, and, in order to avoid trouble on account of his indebtedness to the Chicago commission house, made his shipments of stock in the name of Stewart, Moeler & Co., a co-partnership doing a lumber, coal, and grain business in the town of Reinbeck. Drafts in favor of this firm were drawn against shipments of stock bought by Bryan, but the drafts were deposited in the Reinbeck bank to the credit of Bryan. Bryan commenced using the name of Stewart, Moeler & Co. without their consent, but they afterwards ratified the same, and must be held bound thereby. This firm had no interest in Bryan's business. They simply acted as his bankers. When Bryan purchased live stock he issued checks in his own name in payment therefor. The bank paid the checks, and, after charging the amount to Bryan's account, sent them to Stewart, Moeler & Co. Bryan also purchased live stock in the vicinity of Hudson, at which place the firm of Stewart, Moeler & Co. also did business, and they both issued checks on the Hudson Savings Bank. This bank paid both kinds of checks on the promise of one of the members of the firm of Stewart, Moeler & Co. that they would reimburse the bank for any loss it might sustain in the payment of the checks. The Hudson bank forwarded all these checks paid by it to the bank at Reinbeck, and the Bryan checks were charged to Bryan's account, and the amount thereof remitted to the Hudson bank, from time to time, as they were presented. Plaintiff and his assignor, Moag, sold stock, the value of which they seek to recover in this action, to Bryan, and received his checks on the Hudson bank in payment thereof. The property was delivered and the checks were issued during banking hours on the 15th day of January, 1895. Instead of presenting their checks for payment to the Hudson bank, plaintiff and Moag on the 16th day of January, 1895, deposited them with a bank at Cedar Falls for collection, and on the same day this bank forwarded them to the Hudson bank for payment. In the meantime, and on the morning of the 16th day of January, and before the receipt of the checks by the Hudson bank, the Reinbeck bank and Stewart, Moeler & Co. notified the Hudson bank to refuse payment of all Bryan's checks. The hogs purchased from plaintiff, Theusen, were placed with other hogs in the yards at Hudson; and the cattle purchased from Moag, plaintiff's assignor, were shipped to Chicago in the name of Stewart, Moeler & Co., to Ingwerson Bros. & Smith. At that time the indebtedness due this commission firm on account of prior deals in the name of Stewart, Moeler & Co. was something over $1,500, and the proceeds of the cattle so shipped were applied on this indebtedness. Bryan was also indebted at this time to the Reinbeck bank, and on the 16th day of January, 1895, made a bill of sale to the bank, covering the hogs purchased of plaintiff and other property, to secure the indebtedness. These hogs were thereupon shipped in the name of Stewart, Moeler & Co., on a contract of sale theretofore made by Bryan to a concern in Marshalltown. Iowa, and the proceeds were remitted to Stewart, Moeler & Co., and the amount placed to the credit of Bryan on his account with the bank. The action is to recover the value of the hogs and cattle sold from each and all of the defendants. Plaintiff voluntarily dismissed the action as to Bryan, and at the trial the jury was instructed to find a verdict for defendant the Reinbeck bank.

The petition charges a contract liability for the stock on defendants Stewart, Moeler & Co., and also seeks to recover the value thereof from said firm because of fraud. The contract liability is bottomed on the alleged promise of said defendants to guaranty or pay the checks drawn by Bryan on the Hudson bank, and the claim for tort on allegations that, with intent to defraud plaintiff and Moag, defendants Stewart, Moeler & Co. gave notice to the Hudson bank not to pay Bryan's check; that when they gave this notice they knew the live stock purchased by Bryan had not been paid for, and that at that time they had obtained from Bryan a bill of sale covering all his property to secure the amount due the bank, and that at said time the stock had been shipped in the name of Stewart, Moeler & Co., as before indicated; that, with full knowledge of the dishonor of Bryan's checks for the stock, Stewart, Moeler & Co. appropriated the proceeds of the stock for which payment had not been made to their own use and benefit, and that all defendants except Bryan repudiated responsibility for the checks issued in payment...