57 So. 930 | La. | 1912
In these two consolidated suits, plaintiff seeks to hold the Arcadia Planing Mill Company responsible on a note' made to its order and bearing its indorsement. The maker of the note is J. A. Cleaton, who is also made defendant, and does not deny his liability. The note was accepted and indorsed for the company by W. F. Nelson, who also indorsed it individually, and is a defendant in the suit, and does not deny his liability. Judgment is asked also in solido against the members of said company, namely, C. F. Johnson, A. B. Bolinger, and Dait Young. Their defense, like that of the company, is that the said company never had any connection whatever with said note, which was improperly made payable to it, and was indorsed for it by Nelson without authority.
The note sued on was executed under the following circumstances: A sawmill and planing plant and appurtenant timber lands were advertised to be sold at judicial sale at Arcadia in this state. The Union Mill & Lumber Company of St. Louis, Mo., composed of the same Johnson, Bolinger, and Young above named as composing the Arcadia Planing Mill Company, directed W. E. Nelson, its Louisiana agent at Shreveport (the same who indorsed the note sued on), to go to Arcadia and see about purchasing at the sale, and making arrangements for procuring locally the necessary funds. Nelson testified that his instructions included a special instruction to make the purchase jointly with J. A. Cleaton. Johnson, who gave the instructions, testified that they were to get “some one who was in close touch with the interest in this section” to take a one-third interest. He makes no mention of Cleaton. The sale was advertised to take place on Saturday, December 12, 1908. On the preceding day, Nelson had an interview with L. M. Tooke, cashier of the plaintiff bank, which is the local bank. As to what was said at this interview, Nelson and Tooke disagree. Nelson says that Tooke agreed to let the Union Mill & Lumber Company have two-thirds of whatever amount might be necessary for buying the property, and to accept its unsecured note for the loan, and also to let Cleaton have the money necessary to buy one-third, and to accept his unsecured note for the amount; that Tooke’s identical words were that—
“he would let Cleaton have the money and not be hard on him; he could arrange for it there.”
Tooke testifies that he agreed to let the Union Lumber Company, which he knew to be a large, strong concern, have on its note whatever amount it might need for purchasing the plant; and that nothing whatever was said about Cleaton. In a letter addressed to Tooke, under date of December 19, 1908, seven days after the sale, Nelson says:
“The St. Louis office instructed me not to take in any partners that could not arrange for their-own funds.”
In this same letter, he says:
“You will recall that the writer had an understanding with you about Mr. Cleaton’s paper that day I was in Arcadia to bid on this property, which was December 12th, -and you stated that you would let him have this money and would not be hard on him about the indorsement.”
Tooke does not deny that on the day of the sale he agreed with Nelson to let Cleaton have the money, but says that what he told him was that he would not be too- hard on Cleaton about securing the loan—
“That he guessed that Cleaton had some good collateral that he could secure the paper with, or give good indorsement.”
Nelson and Cleaton both bid at the auction, whether in concert or in opposition to each other is not ascertainable from the record. The property was adjudicated to one Merritt; and both Nelson and Cleaton boarded the train to leave. As the train was moving off, they were informed that Merritt was unable to comply with the bid, and that the property would be again auctioned on the same day. At Gibbsland, which was, we understand, the first stop of the train, Nelson got off, and telephoned to Tooke with regard to bidding at this second crying. He testifies that his instructions were to bid in the property in the proportion of two-thirds to the Union Mill & Lumber Company and one-third to Cleaton. Cleaton testifies that he also telephoned to the same effect. Tooke testifies that Nelson alone telephoned him, and that the instructions were to buy for the Union Mill & Lumber Company. Several witnesses testified that he announced at the sale that he was buying for that company, under
“I have had another talk with Cleaton. He is willing to give the interest he has purchased in this property as security for the loan.”
This was not satisfactory to Tooke, and, on January 9, 1909, Nelson came again .to Arcadia. How to arrange the matter was discussed by the parties, and the plan was adopted of Cleaton executing the note sued on in favor of the Arcadia Planing Mill .Company, and of Nelson, acting as the agent .of the company, indorsing it over to the plaintiff bank, and also indorsing it individually. The bank then paid the amount of the note to the officer making the sale.
“Mr. J. W. York went over this morning to take eharge 'of- the Arcadia Planing- Mill for .us, and he has full authority to represent us in the management of the plant in his hands. He is authorized to sign checks, indorse paper and execute any necessary writings. I have full authority personally to sign this letter; but if you wish the same in writing from our Mr. Johnson of St. Louis, advise me first what is' wanted' and I will take the matter up with the St. Louis office. This however is unnecessary,”
' 'This letter is written from Shreveport as of daté January 14, 1909, and is signed “Union Mill and Lumber Company, per W. É. •'Nelson.” True this was several days after ■ the' note sued on had been transferred to the plaintiff bank, but it shows what authority Nelson had to represent the St. Louis •'members of the Arcadia Planing Mill Company in organizing that company and starting it in business. And a necessary step in ■that connection -was to pay for the sawmill .and planing plant which had been adjudicated to Ms St. Louis principals; and this to the •extent of one-third was done by accepting Cleaton’s note and transferring it to the plaintiff bank in the manner stated.
Nelson' and Oleaton testify that this note was thu's executed and transferred under an understanding with Tooke that the Arcadia Planing. Mill Company was to be a party merely as a matter of form; that the note should be considered to be that of Oleaton to the bank, and Oleaton and Nelson personally be alone responsible on it; that the Arcadia Planing Mill Company was not to be responsible on it, and that the shape in which we see it was given to it at the suggestion of Tooke, who said that an indorsement of some kind was necessary, in order to square him with the national banking laws, and who said, further, that the indorser would have to be apparently good, in order to square him with the board of directors of his bank, and that Nelson would not answer for this purpose, as he was pecuniarily irresponsible; that this plan was carried out after Nelson had positively informed Tooke that he had no authority to sign for the Arcadia Planing Company. Tooke and the bookkeeper of the bank, in whose presence the transaction was agreed to, testify that there was no such understanding, and that Nelson did not disclaim authority to sign for the Arcadia Planing Mill Company. We readily give greater credence to the latter witnesses, first, because the trial judge did so; and, secondly, because the probabilities are ail on that side. It is utterly improbable that Tooke, the managing officer of a bank, would have consented to take Cleaton’s unsecured note after having repeatedly and positively refused to do so, although strongly urged— we may say begged — to do so, and after having refused to accept the pledge or transfer of Cleaton’s one-third interest in the company as such security. Moreover, some discredit is thrown upon the testimony of Nelson by its inconsistency with his letter of December 19, 1908, transcribed supra, and with the testimony of Johnson. In this testimony, he denies that in the conversation in which Tooke agreed to make the loan to Oleaton anything was said about indorsement. He undertakes to give Tooke’s exact words, in order to show that the word “in
Johnson testified that the first knowledge he had of said note having been executed was when he received notice of its protest. But in that statement he is contradicted by one of his own letters.
After the Union Mill & Lumber Company had been made adjudicatee of the sawmill and planing plant, and had paid two-thirds of the price, Nelson, its agent, found himself in the awkward position of having to do something to pay for the remaining one-third, and thereby secure control of the plant, so as to set the partnership agoing. This he did by the execution and transfer of this note. The transaction was therefore in due course of the partnership business. Nelson represented the St. Louis members, and Cleaton, the remaining partner, acted for himself.
As just stated, Cleaton made a transfer of his one-third interest in the partnership to his St. Louis associates. The consideration of the transfer was $1,840, the exact amount of the note, cent for cent. When he came back, he told several persons that he had transferred his said interest in consideration of his said partners agreeing to hold, him harmless on the note. He and Johnson testified that the consideration of the transfer was Cleaton’s share of the losses in the business of the firm; and in that statement they are corroborated by a lady stenographer in the St. Louis office, who testified that she heard their conversation, and that the consideration of the transfer was Cleaton’s share of the losses sustained by the partnership. In a sense, the debt represented by this note constituted a part of: the'losses, if losses there were, and- we can readily understand that, from simply hearing a conversation between the two men, this lady' may have gathered from it the meaning which she testifies to. But from- the fact of the transfer having been made for the exact amount of the note, and from- the statements made by Cleaton on his return,' and, in fact, from all the. circumstances' of the ease, the inference is irresistible that the assumption of the note was the consideration of the transfer.
There is an alternative demand that, in ease the defendant company is'not held liable on the note, the said'transfer "be set aside as in fraud of creditors. -The trial judge, having held the company liable, passed this alternative demand in silehce, and5 we, for the same reason, spare ourselves the trouble of discussing it.
After the absentee defendants had made themselves parties to the suit by appearing: and asking that the property attached' be, released to them on bond, they filed an ex-: ception, urging that the appointment of the curator ad hoe to represent them was • irregular, because the clerk of court who made it was without authority to do so; the clerk, being authorized to make such appointments' only in the absence o.f the .judge: from .the
The absentee defendants having waived citation by making voluntary appearance in the suit, and there being no prayer that the attachment be set aside on the ground of want of authority on the part of the clerk to grant the order under which it was made, or, in fact, on any other ground, we are dispensed from passing on the question thus raised as to whether the said absence of the judge was of the character contemplated by the law.
Judgment affirmed.