ROBERT DOLLAR, Respondent, v. THE INTERNATIONAL BANKING CORPORATION, Appellant, and EDWIN H. LAMME, Codefendant.
Civ. No. 771
Second Appellate District
April 28, 1910
13 Cal. App. 331
ID.—DEMAND OF PAYMENT AT HONGKONG—REFUSAL—ACTION IN THIS STATE.—Where payment of the note was demanded in Hongkong by the assignee of the instrument, and payment was there refused, an action may be maintained against the International Banking Company in this state, where it has an office here, and enters an appearance and questions the sufficiency of the complaint.
ID.—IMPORTANCE OF PROPER DEMAND.—Whether or not proper demand was made at the place of payment becomes important in determining the right to bring the action in a court of this state, as well as in ascertaining upon what basis the value of the money so deposited is to be fixed, if plaintiff is entitled to recover.
ID.—INDORSEMENT TO PLAINTIFF‘S ASSIGNOR—PAYMENT OF ASCERTAINED DEBT OF PAYEE—JUDGMENT OF CONSULAR COURT.—Where the indorsement of the payee to plaintiff‘s assignor was in consideration of the payment of an indebtedness of the payee to the assignor, the judgment of a consular court establishing the debt established nothing more than that the corporation payee was indebted to the first assignor in the sum named in the judgment, upon payment of which the corporation payee made the indorsement.
ID.—INEFFECTIVE SUPPLEMENTAL DECREE—ATTEMPT TO TRANSFER TITLE.—A so-called supplemental decree of the consular court, attempting to transfer the title of the corporation payee to the debtor, was ineffective for that purpose, and did not affect the contract between that company and the banking corporation appellant.
ID.—EQUITABLE ESTOPPEL NOT PLEADED.—An agreement made between the manager of the banking corporation and the creditor of the payee that if he obtained a judgment against the corporation payee
ID.—BASIS OF RECOVERY.—If plaintiff, as assignee of such first assignee, recover in the action, he must do so on the theory of the enforcement of the express contract made with the managing agent of the corporation payee, or the implied contract made by said corporation with the depositor.
ID.—FINDINGS ON SECOND DISMISSED CONSULAR ACTION NOT CONCLUSIVE.—It is held that findings in a second consular action dismissed without prejudice to a new action were conclusive upon neither party, there being no finding that it was rendered for want of authority accompanying the presentation of the certificate by the plaintiff‘s assignor.
ID.—TESTIMONY SHOWING AUTHORITY OF MANAGING AGENT OF PAYEE IN CHINA.—Where the testimony clearly establishes that the vice-president of the corporation payee was its managing agent in China and transacted all its business therein, created debts against the company and paid them in its name, and that no other person acted as its agent in China, such managing agent was authorized to collect the debt, or to make an assignment thereof in payment of the company‘s debt to an assignee, as such manager.
ID.—CONCERN OF DEFENDANT BANK.—The defendant banking corporation is concerned only in knowing that the assignment of the evidence of debt or chose in action against it is of such character as to bind the assignor payee.
ID.—INCOMPETENT ORAL CONTRACT WITH PAYEE.—The incompetency of parol evidence to vary a writing may be considered as matter of law, though admitted without objection; and if the American Commercial Company, by its general manager, had itself presented the deposit receipt and demanded payment, no compliance with an oral contract that the managing agent should produce a resolution of the board of directors could have been made by the defendant a condition precedent to payment of the deposit to such manager.
ID.—AUTHORITY OF MANAGING AGENT TO MAKE ASSIGNMENTS.—Where the managing affairs of a corporation are intrusted to a general managing agent, he has power to transfer the chose in action of the corporation to its creditors, either in payment or as security for a pre-existing debt of the corporation, without express authority from the board of directors, and an assignment so made is valid.
ID.—PRESUMED AUTHORITY OF MANAGING AGENT—EXPRESS AUTHORITY NOT NECESSARY.—The presumption is that such assignment was made by competent authority. No special resolution authorizing him to act in this respect was necessary.
ID.—GOOD FAITH OF CREDITOR PERFORMING SERVICES FOR PAYEE, AT REQUEST OF MANAGING AGENT.—Where there is no question of the good faith of the first assignor of the bank deposit in doing services for the corporation payee, at request of its managing agent, or in taking a receipt of its indebtedness in full payment of the bank certificate, he thereafter stood in the shoes of the American Commercial Company as the owner of the paper, subject only to such equities as the bank might set up against the company payee itself.
ID.—ORAL CONTEMPORANEOUS AGREEMENT AS TO PROOF OF AGENT‘S AUTHORITY NOT BINDING ON ASSIGNEE.—The oral contemporaneous agreement between defendant and the agent of the corporation payee as to proof of his authority, not being binding upon the payee, can constitute no defense to the action of the assignee of the payee, or his successor in interest.
ID.—ACQUITTANCE BY ASSIGNEE PROTECTION TO BANK.—The acquittance by the bona fide assignee of the corporation payee would be a sufficient defense in favor of the banking corporation defendant to any subsequent demand upon the bank by the corporation payee.
ID.—CONTEMPORANEOUS ORAL AGREEMENTS BETWEEN PARTIES TO WRITTEN CONTRACT FOR MONEY.—Contemporaneous oral agreements between the parties to a written obligation to pay money, as to the manner of the negotiation, cannot be set up as a defense against payment of the money under the contract in an action by the payee or his assignee.
ID.—RULE AGAINST VARIATION OF WRITTEN CONTRACTS BY PAROL EVIDENCE—APPLICABILITY TO NON-NEGOTIABLE PAPER.—Such oral agreements come under the rule that written contracts cannot be varied by parol agreements, and this rule is applicable to such agreements, irrespective of whether the instrument be negotiable or non-negotiable.
ID.—INCOMPETENCY OF PAROL EVIDENCE DISTINGUISHED FROM SECONDARY EVIDENCE.—The rule that incompetent parol evidence to vary a writing can have no legal affect, though proved without objection, is to be distinguished from the rule as to secondary evidence.
ID.—AUTHORITY OF MANAGING AGENT—NEGATIVE AND POSITIVE PROOF.—The failure of the corporation payee to object at any time to the authority assumed by its managing agent in China, and the absence of any proof by the defendant that he lacked such authority, taken in connection with the positive proof that he was such managing agent, and exercised all the authority of the corporation
ID.—TESTIMONY TO AUTHORITY OF AGENT—INFERENCES—FACTS STATED—APPELLANT NOT PREJUDICED.—Where the assignee of the payee, in testifying to the authority of the managing agent, made statements in the nature of conclusions or inferences, but these were accompanied by a statement of the facts from which the inferences were drawn, it cannot be said that such inferences objected to could have been prejudicial to the appellant‘s case before the trial court.
ID.—DEMAND REGULARLY MADE BY ASSIGNEE—DAMAGES—INTEREST.—The demand having been regularly made by the first assignee at Hongkong, the damages for failure to pay are to be computed under the rule declared in subdivision 1 of section 3336 of the Civil Code, which would entitle the plaintiff to the market value at Hongkong when payment was refused, with interest, as allowed in the judgment.
ID.—INDEMNITY BOND NOT REQUIRED UPON LOSS OF NON-NEGOTIABLE INSTRUMENT.—The rule in courts of equity that a bond will be required upon a lost instrument has well-recognized exceptions, one of which is where the note is non-negotiable.
APPEAL from a judgment of the Superior Court of San Diego County, and from an order denying a new trial. W. R. Guy, Judge.
The facts are stated in the opinion of the court.
Platt & Bayne, Geo. J. Leovy, and Lloyd M. Robbins, for Appellant.
J. Wade McDonald, for Plaintiff-Respondent.
Puterbaugh & Puterbaugh, for Edwin H. Lamme, Defend-ant.
TAGGART, J.— This is an action by the assignee of the indorsee of a deposit receipt to recover the value in United States money of two thousand Mexican dollars deposited with the banking-house of the defendant corporation, located in Hongkong, China. Judgment was for plaintiff against the banking corporation, and the latter appeals from the judgment and the order denying its motion for a new trial.
The depositor, the American Commercial Company, was incorporated in the District of Columbia for the purpose of
“Notice of withdrawal given 26 November, 1904, due 26 November, 1905.
“International Banking Corporation.
“Deposit receipt.
“Not transferable.
“Hong Kong, 26 November, 1904.
“2,000 Locally.
“Received from Messrs. The American Commercial Company Dollars Two Thousand Locally as a deposit repayable here, bearing interest at the rate of five per cent per annum, to remain until twelve months notice on either side expires.
“No. 3/134.
“For the International Banking Corporation.
“L. L. FESPNER, Accountant.
CHAS. C. R. SCOTT, Manager.”
On the back of said receipt were the following words in print: “N. B. The within sum cannot be drawn, unless this receipt is returned, signed by the depositors; nor can the amount be drawn against in separate sums by cheque or draft. The interest will cease at the expiration of notice of withdrawal.” From the deposition of Manager Scott, who signed the foregoing receipt, it appears that when Mr. Edwards called, accompanied by the other gentlemen as above stated, he, Scott, acting on behalf of the defendant corporation, at first refused to receive the money because “Mr. Edwards could show me no authority for acting as managing director of the American Commercial Company. He, how-
Through transactions had with E. Edwards, acting in the name of the American Commercial Company, the latter became indebted to the defendant Lamme who, in an action brought in the United States consular court at Shanghai, China, on July 27, 1905, recovered judgment against the American Company in the sum of two thousand one hundred and fifty Mexican dollars, with interest. On October 2, 1905, he also procured from the same court what is designated as a supplemental decree and order of satisfaction of judgment, wherein it is recited that the deposit receipt above set out “was by the defendant duly assigned, transferred and delivered to the plaintiff by the defendant on or about the tenth day of March, 1905, to secure the debt due from the defendant to plaintiff upon which the judgment in this cause was rendered.” It is further recited that plaintiff is willing to take the instrument in satisfaction of the judgment, and ordered that the title of the plaintiff in the receipt and the money evidenced thereby be confirmed and quieted in him and the same credited on said judgment in full payment and satisfaction thereof. The recital in the judgment in this consular action as to service of summons and acquiring jurisdiction of the defendant is as follows: “That the defendant has been duly served with summons by delivering a copy of the same to Edward Edwards, the vice-president, a director and agent of said defendant, he being the highest officer of said defendant company found within this jurisdiction, and the said defendant having appeared by said Edwards and filed its answer herein, admitting all the allegations of plaintiff‘s complaint.” The only showing of jurisdiction to enter the “Supplemental Decree” is that which appears in the original judgment-roll resulting in the judgment in favor of Lamme against the American Company.
The “deposit receipt” indorsed, “The American Commercial Company, by Edward Edwards, (Per) Manager,”
Subsequently the receipt of deposit was lost (March, 1907), and later (January 2, 1908), the rights of defendant Lamme in the instrument in question and the funds which it represented were assigned to plaintiff, and, after demand made by plaintiff on the San Francisco house of defendant, this action was brought to recover the value of the Mexican money in United States gold coin at Hongkong on the date of the demand made by Lamme (November 27, 1905), together with
The instrument in question was by this court declared to be an assignable instrument but not negotiable in the sense that the term “negotiable” is used when applied to commercial paper. (Dollar v. International etc., 10 Cal. App. 83, [101 Pac. 34].) By the law of the case, then, the instrument must be considered as non-negotiable, and while it might be transferred by indorsement, the indorsee obtained no better title to the instrument than his indorser, notwithstanding it was indorsed to him before maturity. (
Whether or not a proper demand was made at the place of payment becomes important in determining the right to bring the action in a court of this state, as well as in ascertaining upon what basis the value of the “money” so deposited is to be fixed, if the plaintiff is entitled to recover. The judgment of the consular court of July 27, 1905, even if it were conceded to be based upon proper service on the American Commercial Company, established no more than that that company was indebted to Mr. Lamme in the sum named in the judgment. The so-called “supplemental decree,” whereby the court attempted to transfer the title of the American Company to the receipt to Mr. Lamme, was ineffective for that purpose, and did not affect the contract between that company and the appellant. The only possible application it could have would be in connection with the testimony of Mr. Lamme to the effect that Mr. Scott made a statement under oath that he had a conference with General Bragg, the latter acting on behalf of Mr. Lamme, wherein there was “practically” an arrangement, and Scott consented, that if the judgment in the consular court first above mentioned were obtained and the certificate applied upon it, “that the money would be paid on presentation.” Such an estoppel being in the form of a new cause of action should have been pleaded
Both appellant and respondent rely upon the “findings and judgment” in the second consular action, which were rendered on February 24, 1906. No finding made therein, however, which was not necessary to the judicial action taken by the court, can affect the rights of either of the parties, and the judgment, as above stated, is one of dismissal without prejudice to the plaintiff‘s right to bring another action. (Rosenthal v. McMann, 93 Cal. 505, 509, [29 Pac. 121].) The findings made on behalf of the plaintiff are conclusive upon no one, and there is no express finding of fact from which it can be determined that the judgment of dismissal was rendered because the authority accompanying the presentation of the instrument was not adequate. It is only argumentatively that this can be assumed to be the basis of the court‘s dismissal. Neither can this be implied or presumed from the judgment itself.
It appears from Mr. Lamme‘s testimony on the trial that he knew from dealings had by him with Edwards in the name of the American Commercial Company; from papers and documents seen by him while acting as attorney for the company on the employment of Edwards; from his knowledge that Edwards appointed agents and subagents for the corporation in Canton, Shanghai, and other places in China, and created debts against the company and paid them in its name; and from the fact that no other person acted as its agent in these places during this time, and that he never heard the authority of Edwards questioned except in this transaction, as well as from Edwards’ own statement, that he (Edwards) was the vice-president, one of the directors of and the general manager for the American Commercial Company in China. It is not shown that any of this information was brought home to the defendant bank, or that the bank had any other way of knowing that Edwards had such authority or occupied such a position, but from Mr. Lamme‘s testimony it appears that Mr. Scott stated at the trial before the consular court that “the only reason for refusal to pay the money was that there had been no power of attorney pre-
The defendant bank is concerned only in knowing that the assignment of the evidence of debt or chose in action is of such character as to bind the assignor. (Greig v. Riordan, 99 Cal. 323, [33 Pac. 913].) If the American Commercial Company had itself presented the deposit receipt, no compliance with the oral contract as to the evidence of authority of Edwards could have been made a condition precedent to payment, if it be assumed in this connection that such a parol contract was admissible in evidence, or, being in evidence, could be considered by the court. Indeed, it could not well be contended that, in the absence of this contract, Mr. Edwards could not himself, in his capacity of manager, have withdrawn the money upon signing the name of The American Commercial Company, or have made a valid assignment or indorsement of the instrument as manager. As said in McKiernan v. Lenzen, 56 Cal. 61, page 64: “The result of the cases seems to be, that where the management of the affairs of a corporation is intrusted to a general managing agent, he has power to assign the choses in action of the corporation to its creditors, either in payment of, or as security for the payment of, a precedent debt of the corporation, without express authority from the board of directors, and an assignment so made is valid. The presumption is, that the assignment was made by one having competent authority.” No special resolution authorizing him to act in this respect was necessary. (Tuller v. Arnold, 98 Cal. 523, [33 Pac. 445]; Greig v. Riordan, 99 Cal. 323, [33 Pac. 913].)
An ostensible agency is created when the principal intentionally, or by want of ordinary care, causes a third person to believe another to be his agent who is not really employed by him. The authority of such an agent is such as the principal allows such persons to believe the agent to possess. (
It also appears from the written opinion of the trial judge found in the record that the findings as to the rights of plaintiff were predicated to some extent at least upon the showing that if there had been any real question as to the authority of Edwards to act in the premises, his principal would have made known its objections to the defendant bank within the time that elapsed from the date of the deposit of the money until the bringing of the action. So, also, in this connection may be considered the materiality of the evidence of Lamme tending to establish, not only that Edwards was the manager, but that there was no other representative of the company in China, and that no one questioned his authority to act in this sole and unrestricted manner. There was no showing upon the part of the defendant bank with respect to the absence of authority of Edwards or any denial of his powers generally, and the evidence mentioned tended to show that all the business of the company in China was performed by him or those whom he appointed and directed, and was competent for that purpose.
The testimony of the witness Lamme as to his knowledge of the capacity in which Edwards was acting for the American Commercial Company contained some things which were in the nature of conclusions or inferences, but these were accompanied by a statement of the facts from which the inferences were drawn, and we do not think the evidence objected to could have prejudiced appellant‘s case before the trial court.
The demand for payment having been regularly made by Lamme at Hongkong on November 27, 1905, the damages for failure to pay are to be computed under the rule declared in subdivision 1 of
Judgment and order affirmed.
Allen, P. J., and Shaw, J., concurred.
A petition for a rehearing of this cause was denied by the district court of appeal on May 28, 1910, and the following opinion was then rendered thereon:
The petition for a rehearing is denied.
A petition to have the cause heard in the supreme court after judgment in the district court of appeal was denied by the supreme court on June 27, 1910. Beatty, C. J., dissented from the order denying such rehearing.