Lewis v. Metcalf

53 Kan. 219 | Kan. | 1894

The opinion of the court was delivered by

AlleN, J.:

The only substantial controversy in this case is as to the legal effect of the transaction by which the defendants placed the proceeds of the hogs sold by them to the credit of W. H. Morris in the McCune bank and the subsequent acceptance by Morris of the application of the proceeds to the payment of his individual debt to the bank. While counsel for the defendants in his brief and on the argument challenges the good faith of the transaction between Morris and the plaintiff, the court specifically finds in favor of the plaintiff on that issue, and there is no controversy as to the fact that the mortgage was duly recorded soon after its execution. The court seems to have based its decision on the existence of a usage at the Kansas City stock yards of placing money in a Kansas City bank to the credit of a bank located near the shipper’s residence, for his use, and to have held that, having so placed the funds, their duty was at an end, and that the McCune bank might lawfully apply the money to the payment of any indebtedness due from Morris to it.

1' wSSling —when not. Counsel for the defendant in error cites many authorities in support of the proposition that, the plaintiff having authorized Morris to sell the hogs in question, the purchaser from him obtained a good title. There can be no doubt of the correctness of this proposition. It is not controverted. The real question in this case is, whether the defendants, by reason of a special usage at the Kansas City stock yards, have a right to select a bank which is a creditor of the agent, and remit the proceeds of the property covered by plaintiff’s mortgage to such creditor, and thereby discharge themselves from liability. It is conceded not only that Morris could sell and pass a good title to the mortgaged property, but that he also had the right to receive the proceeds as the agent of Lewis. This, however, gave Morris no right to divert the fund to the payment of his individual debt without the plaintiff’s consent. May the defendants, then, and the McCune bank so divert it without the consent either of Morris or the plaintiff? The defendants in error contend that, having acted in accordance with a settled business custom, and having selected solvent, banks, in accordance with such custom, they have done their whole duty. The theory on which special usages are held to be a part of contracts made with reference to business transacted at the place where such usages prevail is that the usages are presumed to be known to both parties to the transaction, and they are presumed to have contracted with reference to them. We think the facts disclosed by the testimony in this case negative any such presumption. It appears that, in a former transaction between the defendants and Morris, they paid him the proceeds of stock sold by them by checks, at their office. Morris testified that at the time of the shipment he sent defendants a postal card informing them that the hogs were to be sold for account of T. D. Lewis, and directing them to remit by check to T. D. Lewis by W. H. Morris. The defendants deny having received this postal card. After the receipt of Morris’s telegram inquiring what had become of the hogs, the defendants, on October 18, telegraphed him: “Proceeds placed in Farmers’ Bank, McCune. See our letter.” On the same day Morris answered by telegram, “Cannot accept deposit in bank here. Must have check to T. D. Lewis by W. H. Morris. Answer at once.” The defendants also, on October 17,. wrote Morris as follows:

“ I never was more astonished than, after examining, to find that your proceeds had not been sent off on the 10th. A party was in that day who told our clerk to hold the proceeds until he returned from a visit to Illinois, and I told him to mail you your proceeds in several checks, but as our clerk has been with us only a short time, and is not yet familiar with our customers, he got confused on the two, and, by mistake, held yours.”

This letter clearly indicates that they intended to remit by check, and not in the manner in which this remittance was finally attempted, and, taken together with the former transaction between these parties, completely negatives the idea of any usage of such character that the parties to this case will be presumed to have dealt in reference to it. This letter from the defendants clearly shows that they did not contract with reference to such a usage, but that the defendants intended at the time the proceeds were first received to remit in an entirely different way. It is extremely doubtful whether the evidence offered at the trial establishes any such uniform custom as is claimed, irrespective of the special dealings between Morris and the defendants. It is clear, from all the evidence, that there are at least many exceptions in practice. For cases illustrative of the rule as to the essentials of a special usage, see Wall v. Bailey, 49 N. Y. 467; Walsh v. Transportation Co., 52 Mo. 434; Scudder v. Bradley, 106 Mass. 422; Wallace v. Morgan, 23 Ind. 399; Bailey v. Bensley, 87 Ill. 556; Smythe v. Parsons, 37 Kas. 79. It is generally held that the custom must be uniform and reasonable. It is also generally held that a party who relies on a special usage must plead it. (Lindley v. National Bank, 41 N. W. Rep. 381; Governor v. Withers, 50 Am. Dec. 95; Wallace v. Morgan, supra.) This was not done in this case. We base our decision, however, on the fact that it affirmatively appears that the parties to this transaction did not deal with reference to any such alleged usage.

2' cationofau-' tice-admis-sionsof agent. The proceedings in a suit brought by the McCune Bank v. W. H. Morris, before W. B. Crawford, a justice of the peace of Crawford county, were introduced in evidence. The summons in that case was issued on the 30th day of November, 1888. Testimony was also offered as to statements, claims and declarations then made by Morris with reference to the credit of the proceeds of this shipment of hogs on his note held by the bank. The suit before Esquire Crawford was to recover the balance due on the note against Morris held by the bank. It clearly appears from all the evidence that the defendants were fully informed of the plaintiff's rights long before that suit was commenced, and we think the uncontra-dicted testimony shows that Morris’s agency with reference to the collection of this claim had terminated. Mr. Moore, one of the defendants, himself testified to having received a letter from Hutchings & Keplinger, plaintiff’s attorneys, dated November 2, informing them that this claim was then in their hands and requesting a settlement of it. While there is no doubt that actual payment by the defendants to Morris would have been good, it may well be doubted whether Morris had the right to accept an indebtedness due from himself in discharge of the money due his principal from the defendants, especially after they were fully informed of all the facts. (Organ Co. v. Lasley, 40 Kas. 521; Deatherage v. Henderson, 43 id. 684; St. John v. Cornwell, 52 id. 712.) The court found that the trial before the justice of the peace occurred December 22, and that at that time Morris had no other or further authority from plaintiff, Lewis, than that before mentioned; that the plaintiff was not present at said trial, did not know of it, and was not represented by counsel. While this is not a specific finding to the effect that Morris’s agency had terminated, we think the uncontra-dieted evidence clearly shows that his agency had ceased more than a month before that trial, and < 7 that all of the testimony with reference to his statements and declarations at or about the time of the trial were erroneously admitted.

We are asked on behalf of the plaintiff in error to direct judgment in his favor for the amount claimed. The findings, however, of the trial court are not sufficient to warrant us in doing so. The judgment is reversed and a new trial ordered.

All the Justices concurring.