Bay City Bank v. Lindsay ( 1892 )

Montgomery, J.

The plaintiff declared on the common counts, and furnished a bill of particulars which limited its demand to a claim for $2,000 paid E. J. Yance & Go. on December 15, 1890, for the firm of Lindsay & Gamble, and at their request, to take up the draft hereinafter referred to. The other item in the bill is the liability of defendant on the draft, a copy of which was served with the declaration. The draft in question was dated September 12, 1890, was drawn by Lindsay & Gamble on E. J. Yance & Co., payable to the order of the drawers, and was accepted by E. J. Yance & Co., payable at the Bay City Bank.' It was indorsed as follows: “Pay E. W. Leech & Co. or order, Lindsay & Gamble; .E. W. Leech & Co.” (in blank); and also: “Pay to the order of W. 0. Cliff, cashier, for collection, for account of the Peninsular Savings Bank, Detroit, Mich. J. B„ Moore, Cashier.”

The case rested upon the testimony adduced by the plaintiff, which tended to show that the defendant’s firm, at the date of the transactions in question, consisted of A„ G. Lindsay and Patrick M. Gamble, since deceased; that. Gamble was a member of all three firms, — of Lindsay & Gamble, E. J. Yance & Co., and E. W. Leech & Co.; that on the day of maturity of the draft, it was presented for payment at the Bay City Bank; that payment was-refused, for the reason that there were no funds of B. J. Yance & Co. in hand to pay with; that during the day the attention of the bookkeeper of E. J. Yance & Co>.,. Mr. Butts, was directed to the subject by the cashier of the plaintiff. Eor a statement of what followed, we quote from the testimony given by Mr. Butts on the trial:

“1 went to the bank, and told Mr. Young, the cashier of the Bay City Bank, that it was paper that Lindsay & Gamble should pay, and that I would have to make a draft back on them to pay it with. Mr. Young said he would take a demand draft or a sight draft, if I would call up Lindsay & Gamble, and have Mr. Lindsay say that he would take care of it. I then went to our office, and called up Mr. Lindsay, and reminded him of this paper coming due that they should pay. I asked him if he would take care of a demand draft, if I should make it, ■and he said, ‘ On demand is a pretty short time; ’ he hardly thought he would be able to take care of it. He asked me if I could not make it for a few clays’ time. I think he mentioned 10 days. I told him I hardly thought the bank would want to use a paper of that time, but, if I could make it at sight, that would give him three days’ time to ■ pay it. ‘Well,’ he says, ‘do the best you can.’ I then went to the bank, and told the cashier that Lindsay .& Gamble would take care of a sight draft. ' The bank •officer said, ‘All right;’ that they would take it in payment of this paper.

“Q. That paid the paper.

“A. Yes, sir.”

'The circuit judge directed a verdict for defendant, and plaintiff brings error.

1. It is first insisted that the draft should not be ¡treated as paid, but should be held good in the hands of 'the bank; and it is claimed that the case falls within that •class in which it is held that payment by an indorser or ■other party to commercial paper, who, as between himself and the other parties to such paper, stands in the position of surety, does not necessarily render the paper functus officio, but that it may be again put afloat by the indorser. Daniel, Neg. Inst. § 1238, and cases cited. We Thb ink, however, the testimony in this case does not show .an attempt on the part of Vance & Co. so to treat this paper. This draft, when presented, had a limited indorse- ■ ment, and the undoubted intention on the part of Vance •& Co. was to pay and retire it, and the bank, in terms, ¡accepted a sight draft, and agreed to make payment, and «did in fact make payment. There was no intention on the part of either Vance & Co. or the officers of the bank that title should vest in the plaintiff. This is made further •conclusively to appear by the fact that the bank charged Lhe amount of the draft in question to the account of Vance & Co., and credited the proceeds of the sight draft, .and afterwards fixed the liability of Vance & Co. by protesting the sight draft. It is unnecessary, therefore, to ■decide whether Vance & Co. had the right to reissue the draft after payment by them, as no attempt to do so is shown. The circuit judge was right in holding that the draft was paid, and that no recovery could be had thereon.

2. The question of defendant’s liability, under the money count, for money paid for his use, is more difficult of ■determination. The plaintiff’s contention is that the transaction amounted to a payment by the bank of 12,000 mpon a demand upon which the defendant was liable previously, and which it was the defendant’s duty to pay, .and which the bank did in fact pay at his request; and it is said that the fact that the defendant agreed to accept .a draft for the amount, and that such agreement is void under How. Stat. § 1583, does not change the relations -of the parties; that the right of action was complete when the money was advanced. There is much force in this ■contention. . Indeed, it seems to us unanswerable, if it ■can be held that the transaction in question established •any privity between the defendant and the bank. But a ■careful examination of the testimony discloses the fact that the defendant did not authorize Butts to speak for him. There is nothing in Butts’ testimony which discloses that he was directed to ask any other than Vance & Co. to make payment of this draft. The testimony further ;shows that the plaintiff in fact accepted the sight draft ■of Vance'& Co. on defendant, and credited this to the Account of Vance & Co., and charged the time draft to them. Vance & Co. were liable to the bank, and the ■defendant was liable to Vance & Co. There is, therefore, this additional difficulty standing in the way of plaintiff’s necovery here: Not only was the agreement to accept oral, but it was made to Vance & Co., and no authority to bind defendant was given, except an oral promise to accept the sight draft.

It follows that there was no such privity of contract between the plaintiff and defendant as entitles the plaintiff to recover.

Judgment is affirmed, with costs.

The other Justices concurred.