Case Name: Huston v. Tyler, Appellant
Court: Supreme Court of Missouri
Jurisdiction: Missouri
Decision Date: 1897-06-22
Citations: 140 Mo. 252
Docket Number: 
Parties: Huston v. Tyler, Appellant.
Judges: All concur.
Reporter: Missouri Reports
Volume: 140
Pages: 252–270

Head Matter:
Huston v. Tyler, Appellant.
Division Two,
June 22, 1897.
1. Assumpsit: inducement: loan: procuring note. The petition alleged a specific contract on part of defendant to procure a note signed by four persons; that defendant presented to plaintiff a note purporting to he signed by said four persons, and plaintiff believing defendant’s representations was thereby induced to loan the principal maker $2,500; that the names on said note afterward proved to be a forgery except as to the principal maker, whose agent defendant claimed to be. Held, that the petition states an action in assumpsit, based on a specific contract on the part of the defendant to procure and deliver to plaintiff the note of the parties named, and without proof of such specific contract or inducement plaintiff can not recover.
2. Enlargement of Pleading: implied warranty. Plaintiff having bottomed his action on an express warranty by defendant that the signatures to the note were genuine, is precluded from relying on an implied warranty to the same effect. A party will not be permitted to sue upon one cause of action, and recover upon another.
3. Good Pleading. The fundamental requirement of good pleading, whether under the code or at common law, is that the petition must be so drawn as to tender a definite issue or issues, and not be so obscure as to require the defendant to grope in the dark to discern what the meaning of the pleading is.
4. Responsibility of Loan Agent. Defendant having disclosed to plaintiff that he was acting simply as the agent of the principal maker of the note in procuring the loan, is not responsible because such principal rendered the note worthless by forging thereto the names of the other makers.
5. Question for Jury. The evidence was conflicting as to whether defendant disclosed to plaintiff at the time the loan was made the fact that he was simply the agent of the pi’ineipal maker of the note; held, that this faet was a question for the jury; held, also, that in face of such evidence a peremptory instruction to find for plaintiff was error.
Appeal from Buchanan Circuit Court. — Hon. H. M. Ramey, Judge.
Reversed and remanded.
' Thomas J. Porter, Ben. J. Woodson, and B. B. Vineyard for appellant.
(1) An agent acting in good faith for his principal whose name is disclosed to a third person with whom he may be dealing as such agent, can not be held personally liable to such third person, in the absence of a special agreement on the part of such agent to become individually responsible. Mechem on.Agency, secs. 546 and 555. (2) This principle of non-liability of an agent, where the name of his principal is disclosed, is as much applicable to note brokers, or those engaged in borrowing money for others, as to any other kind of agents. Tiedeman on Com. Paper, sec. 245; Mechem on Agency, secs. 929 and 956; Lyons v. Miller, 6 G-ratt. 427. (3) As said by the New York Court of Appeals, on the subject of implied warranty: “The question as to whether there was an implied warranty depends upon the facts as to whether the defendant was an agent, and disclosed his agency to the plaintiff, or whether that fact was known and understood by its officers in making the purchase.” Bankv. Gallaudet, 120 N. Y. 308; Worthington v. Cowles, 112 Mass. 30; Mechem on Agency, secs. 546 and 556; Whitney v. Wyman, 101 U. S. 392. (4) Defendant had a right to go to the jury upon the circumstances attending the transactions which apprised plaintiff of his agency. If plaintiff knew, or from the circumstances ought to have known, that defendant was dealing simply as the agent of Smith, then plaintiff should not have recovered. Worthington v. Goioles, 112 Mass. 30; Klosterman v. Loos, 58 Mo. 290; Hartsell v. Crumb, 90 Mo. 639; Mechem on Agency, sec. 546. (5) With the admission of good faith and the proof by defendant and his witnesses that plaintiff had been informed of the fact that defendant was acting solely for and as the agent of Smith, it is quite apparent that the court had no right to instruct the jury peremptorily to find for plaintiff. Page v. Lathrop, 20 Mo. 594. (6) Plaintiff’s petition being based on what plaintiff charges to be an express agreement between himself and defendant, he ought not to have been permitted to recover in the absence of proof of that agreement. He could not recover on account of tortious act of the defendant. Ogden v. Reymond, 22 Conn. 385; Carson v. Cummings, 69 Mo. 325; Sumner v. Rogers, 90 Mo. 324. (7) Nor cpuld he recover on any implied warranty as to the genuineness of the signatures to the note. An express agreement or warranty excludes the idea or consideration of an implied one. Internal & Co. v. Smith, 17 Mo. App. 264; Baldwin v. Van Deus,en, 37 N. Y. 487; Benny v. Foster, 42 N. H. 175; McGreio v. Fletcher, 35 Mich. 104; Yeats v. Ballentine, 56 Mo. 539; Carson v. Cummings, 69 Mo. 325;- Sumner v. Rogers, 90 Mo. 324. (8) The contract set up in the petition charging that defendant agreed (not alleged or proven to be in writing) to procure and deliver to plaintiff the note of the character and description mentioned therein, is within the the statute of frauds. Allen v. Richard, 83 Mo. 55; Springer v. Kleinsorge, 83 Mo. 152; Finev. Hornsby, 2 Mo. App. 61; 8 Am. and Eng. Ency. of Law, p. 710.
Brown & Pratt, Vinton Pike, and Willard P. Hall for respondent.
(1) An agent warrants his authority to act for those for whom he assumes to act; and this is true, although the agent may honestly believe that he has the authority and makes no express representation thereof. Mechem on Agency, secs. 542-546; Story on Agency, sec. 264; Farmers’ Trust Co. v. Floyd, 26 N. E. Rep. 110; White v. Madison, 26 N. Y. 117; Bishop on Con. 1120; Wharton on Agency, sec. 524; 1 Parsons on Con. [6 Ed.] 67. (2) The measure of damages in such case is what the other party to the contract would have been entitled to recover on the contract had it been authorized. 3 Sutherland on Dam., pp. 52-59. (3) The petition in this case is not based ■upon an agreement .by Tyler to procure a note signed by the parties named; the agreement is set out by way of inducement in connection with all the other facts connected with the transaction. The cause of .action grows not out of the single fact referred to, but out of all the facts stated in the petition. It was at common law a mooted question as to whether the form of action on the facts stated was properly in assumpsit or ■on the case. But under our code there is only one form of action. All the facts being stated in the petition, the plaintiff is entitled to the relief, if any, which ■the law gives him on those facts. Trust- Co. v. Floyd, 26 N. E. Rep. 110; White v. Madison, 26 N. Y. 117.
Broten & Pratt, Vinton Pike, and Willard P. Hall for respondent on motion for rehearing.
(1) The court overlooked the distinction between this case where the agent undertook and assumed to eom-plete the contract by delivering the note to the payee named therein, and the ease in which an agent or broker sells a completed note. Jefts v. York, 10 Cush. 592; Byars v. JDoore, Adm’r, 20 Mo. 284; Wharton on Agency [Orig. Ed.], secs. 524, 541; Story on Agency [8 Ed.], sec. 264; 1 Parsons on Con. [6 Ed.], pp. 66, 67; Bishop on Con., sec. 1120. (2) The court overlooked the fact that the defendant made no objection in the trial court that there was a variance between the proof and the allegations of the petition. Such objection can not be made in this court for the first time. Bank v. Ley ser et al., 22 S. W. Rep. 504; Meyer v. Chambers, 68 Mo. 626; Fischer v. Max, 49 Mo. 404. But there was no variance. The rule is that the pleader may declare an express non-special contract and recover upon proof of an implied promise. But he can not declare on a special contract, and recover upon proof of an implied promise, nor vice versa. Foerster v. Foerster, 88 N. E. Rep. 426. (3) The court erred in holding that this was an action on contract, and that at common law the action would have been denominated “express assumpsit.” Byars v. Boore, Adm’r, 20 Mo. 284; Hamlin v. Abell, 120 Mo. 198; Ballon v. Talbott, 16 Mass. 461; Lane v. Corr, 25 Atl. Rep. 820; Cole v. O’Brien, 51 N. W. Rep. 316; Abbey v. Chase, 6 Cush. 54; Ogden v. Raymond, 22 Com. 379; Bartlett v. Tucker, 104 Mass. 339; McHenry v. Duffield, 7 Black. 41; Hall v. Crandall, 29 Cal. 568; Duncan v. Niles, 32 Ill. 532; Long v. Colburn, 11 Mass. 97; Ibets v. York, 10 Cush. 392; 1 Chitty on Plead. *138. (4) The court erred in holding that there was no proof of the agreement between plaintiff and defendant as pleaded. (5) The court erred in holding that the instruction given by the trial court, directing the jury to find for the plaintiff, would have been improper, even if there had been no conflict in the testimony. (6) The court erred in holding that on the facts stated by tlie plaintiff the question should have been submitted to the jury whether he knew, or could have known by the use of reasonable diligence, that the defendant was acting as the' agent of Thomas Smith.' '
Porter & Woodson and B. B. Vineyard for appellant on motion for rehearing.
(1) The case of Hamlin v. Abell, 120 Mo. 188, in no way conflicts with the opinion of the Supreme Court, as already rendered in this case. (2) An express agreement or warranty excludes the idea or consideration of an implied one. International Go. v. Smith, 17 Mo. App. 264-, Baldwin v. Van Deusen, 37 N. Y. 487; Denny v. Foster, 32 N. H. 175; McGrew v. Fletcher, 35 Mich. 104; Waldhier v. Railroad, 71 Mo. 514; Schneider v. Railroad, 75 Mo. 295; Fuchs v. City, 34 S. W. Rep. 513; Harty v. Railroad, 95 Mo. 368. (3) In actions for deceit the - petition must charge that the false representations were fraudulent.' Hamlin v. Abell, 120 Mo. loe. cit. 201. (4) The court erred in instructing the jury to find for the plaintiff. Mechem on. Agency, sec. 546; Wharton on Agency, sec. 531; Worthington v. Cowles, 112 Mass. 30. (5) The argument of counsel on the motion for a rehearing, referring to the liability of sub-agents, can have no application to this case. There could be no sub-agency under the evidence introduced.
Note. Reversed June 30, 1896; rehearing allowed, and again reversed June 22, 1897.

Opinion:
Sherwood, J.
Action for the sum of $2,500. The nature of the action best appears from the petition, which, omitting caption, etc., is the following:
"That the defendant was at the time hereinafter mentioned, and now is engaged at the said city of St. Joseph, in the business of obtaining loans of money for others on their promissory notes, and that the plaintiff well knew him to be engaged in said business; that the defendant at said city, on the 8th day of April, 1892, prosecuting the business aforesaid,* entered into a contract and agreement with the plaintiff by which the latter agreed to loan twenty-five hundred dollars upon the promissory note of the following parties, to wit, Thos. M. Smith, Pat Curtin, Philip Weck-erlin and Jane E. Smith, which said note the defendant undertook and agreed to procure and deliver to plaintiff; that thereafter the defendant presented and delivered to the plaintiff a promissory note for the sum of twenty-five hundred dollars, purporting to be signed by all of said parties, and represented to the plaintiff that it was the note agreed upon between them; that the plaintiff believed defendant's representation to be true, and relying thereon and being induced thereby, he loaned the sum of twenty-five hundred dollars upon said note and delivered said sum to the defendant and received said note; that the said note was not in fact signed by any of the parties whose names appear signed thereto, except Thomas M. Smith; that on the contrary, the signatures of all the other parties to said note were forged thereto; that the said Thomas Smith was at all the times herein mentioned and is now insolvent ; that payment of said note has been demanded of said Smith, and all the other parties whose names appear signed thereto, and payment has been refused; that no part of the said note, principal or interest, has been paid; that the plaintiff has tendered the said note' to defendant, and has demanded of him payment of said sum of twenty-five hundred dollars, with interest thereon, which has been refused by defendant; that the plaintiff now tenders said note into court for the use of the defendant. Wherefore the plaintiff prays judgment against the defendant for the sum of twenty-five hundred dollars, with interest thereon at the rate of six per cent per annum from said 8th day of April, 1892."
The answer of defendant consisted, in substance, of a general denial, and then of the following: "Defendant admits that he was at the time mentioned in plaintiff's petition, engaged at the city of St. Joseph in the business of obtaining loans of money for others which was known to plaintiff; and that in the prosecution of said business he did on or about April 8, 1892, apply to plaintiff for a loan of twenty-five hundred dollars, but defendant states the fact to be that he did, at said time, at the instance and request of Thomas M. Smith, and as his agent only, apply to plaintiff for a loan of said sum of money for said Smith, fully informing plaintiff who his principal was, and that said Smith proposed the names of Pat Curtin, Philip Weckerlin and Jane E. Smith as his sureties; that plaintiff having agreed to make said loan, defendant so informed said Smith, and received from him the note mentioned in plaintiff's petition to be by defendant conveyed and delivered to plaintiff; that as such agent of said Smith, defendant delivered said note to plaintiff and received from him the amount of said loan and paid the same to said Smith, less the commission due him, for his services in negotiating said loan. Defendant states that he received said note from said Smith believing all the signatures thereto were genuine; and plaintiff received the same from defendant knowing, at the time that defendant was acting in the delivery thereof and in the' receipt of said money as such agent of said Smith, and relying upon the representations of said Smith that the signatures thereto were genuine."
Plaintiff's reply was a general denial, etc.
The evidence on part of plaintiff himself tended to show that while he was in his office on the sixth or seventh of April, 1892, he received a'message over the telephone from defendant asking if he would loan $2,500 for three months on the followihg names: Thomas M. Smith, Pat Curtin, Philip Weckerlin and Jane Smith. Defendant being asked by plaintiff if they (the above named parties) would make a good note, replied, it would be A. 1 or gilt-edged, or something of that kind, but that plaintiff had better investigate the solvency for himself. On investigation plaintiff ascertained that though Thomas Smith had nothing, yet the others were large property owners, etc. Plaintiff then called defendant by telephone, and told him he would make the loan, when defendant replied, "I will get up the note, or get the note, and bring it to you."
On the morning the note bears date, defendant came into plaintiff's office, and said, 'Here's your note, or the note; I want my money, or the money." That thereupon plaintiff asked to whom the check for the amount was to be given, when defendant replied, "Myself; it is to be in my name;" whereupon plaintiff' said: "That is all right; you are good to me for the amount," and drew a check for $2,500, payable to defendant, handed it to him and received in return from defendant a note for a like sum, due in three months, on which note were the names which had been mentioned over the telephone. That defendant did not state to plaintiff for whom he was obtaining the money. But plaintiff did not suppose defendant was getting the money for himself, but supposed he was getting the money for those whose names were on the note.
When the note fell due it was not met, and it was ascertained that the names of all on it but Thomas Smith's were forgeries; and it was admitted at the trial on part of plaintiff that in all of defendant's transactions connected with the note, defendant acted ni good faith, and without knowledge of the non-genuineness of the signatures aforesaid.
Testifying on his own behalf, defendant at first said: "Tom Smith came to me and said he wanted to borrow $2,500. I told him I thought I could get the money. I went to my telephone, and telephoned Mr. Huston, and asked him if he had $2,500 to loan. (Tom told me he wanted to give, as security, his aunt, Jane Smith, Patrick Curtin and Philip Weckerlin.) I told Mr. Huston that Thomas Smith wanted to borrow $2,500, and would give as security his aunt, Jane Smith, Patrick Curtin and Philip Weckerlin. Mr. Huston asked me, 'Is that a good note.?' I told him I thought it was, but I preferred that he would make his own examination, and see to it. He says: 'Then I will do so; I will see to it, and let you know.' The next day Mr. Huston called me up and said I could have the money on that Smith note." Defendant further detailed in evidence that Smith, on being informed that he could get the money, signed a note for $2,500 prepared for him by defendant and gave it to one Asbury to have it signed by the other parties to it, and on the return of Asbury with only two of the namegi of the promised parties to it, Smith went out to get his aunt's signature to it, and shortly thereafter returned with the name of his aunt on the note. That thereupon defendant took the note over to plaintiff's office, and on being asked by him, "How will you have the check made, to you, orto Smith1?" replied, "It don't make any difference; you had just as well make it to me, and I will settle with Smith," etc.
Upon the attention of defendant, however, being called to the first part of his testimony, he said, by way of correction: "I first asked him, 'Mr. Huston, have you got $2,500 to loan?' He said he had. I told him that Tom Smith wanted to borrow that amount, and said that he would give as security on his note, his aunt Jane Smith, Patrick Curtin and Philip Weckerlin." In this statement defendant is fully supported as to the language he stated he used by Miss Maggie Quinliven, who testified that- defendant went to the telephone, called up Mr. Huston, and asked him if he had $2,500 to loan, and then he said: "Torn Smith wants to borrow that amount, and says he will give as security his aunt, Mrs. Jane E. Smith, Patrick Curtin and Philip 'Weckerlin;" then he says, "I think the note is perfectly good, Mr. Huston, but you had better investigate for yourself."
It further appeared in evidence that defendant, on receipt of the check, took out $150 for his commission, and turned over, by check, the residue to Tom Smith.
The foregoing is a sufficient statement of the evidence for the purposes of the present occasion. On the conclusion of the testimony, the court gave the jury a peremptory instruction to find for plaintiff the amount of the note with interest at six per cent from its date, and a verdict in accordance with this instruction was returned.
1. Chitty says: "An inducement in an action of assumpsit is in the nature of a preamble, stating the circumstances under which the contract was made, or to which the consideration has reference." 1 Chitty, Pl. [16 Am. Ed.] *296; Ibid, *111, et seq.; Bliss, Code PI. [3 Ed.], secs. 149, 150; Andrews Stephen's Pl., sec. 53; 5 Am. and Eng. Ency. of Law, 355. Under these authorities it will readily be seen that the "matter of inducement" in this instance begins at the initial statement as quoted from the petition, and ends at the asterisk as marked after the word "aforesaid." The "gist" of the action manifestly lies in the allegation that defendant undertook and agreed to procure and deliver to plaintiff a promissory note of certain named parties, for the sum of $2,500. Were this an action at common law it would be denominated "express assump- sit." 1 Wait's Act. and Def. 373. And notwithstanding the common law forms have been abolished, their substance in great part remains, and this is still true of the distinction between mere matter of inducement and the "gist" of the action or matter of substance. Bliss, Code Pl., sec. 149.
So that from these considerations it must be evident that plaintiff's contention that "the petition in this case is not based upon an agreement by Tyler to procure'a note signed by the parties named," and that "the agreement is set out by way of inducement in connection with all the other facts connected with the transaction," can not prevail. And even if it be conceded that the words from the asterisk downwards, constitute only matter of inducement, still plaintiff is in no better plight, because the allegation is certainly material to plaintiff's recovery; and on this point Ohitty says: "In general, however, every allegation in any inducement, which is material and not impertinent and foreign to the cause, and which consequently can not be rejected as surplusage, must be proved as alleged, and a variance would be fatal." 1 Chitty, PI. *299.
We regard, however, the allegation already noted, not as mere matter of inducement, but as the gravamen of plaintiff's action, and without proof of it, and there was none, he was not entitled to recover in this case.
2. Plaintiff having elected to sue on an alleged express contract on the part of defendant to procure and deliver to plaintiff a promissory note for $2,500, etc., can not enlarge his cause and basis of action by resorting-to the general words of his petition, but will be confined to the act specifically assigned in his petition as his ground of action. Schneider v. Railroad, 75 Mo. 295; Waldhier v. Railroad, 71 Mo. 514; Fuchs v. City, 34 S. W. Rep. loc. cit. 513. And plaintiff having declared upon what is an express contract'or warranty as to the genuineness of certain signatures, he was thereby precluded from relying on an implied warranty to the same effect. International Co. v. Smith, 17 Mo. App. 264; Deming v. Foster, 42 N. H. 175; McGraw v. Fletcher, 35 Mich. 104; Baldwin v. Van Deusen, 37 N. Y. 487.
Nothing is better settled in this State than that a party will not be permitted to sue upon one cause of action and recover upon another. Clements v. Yeates, 69 Mo. 623, and cases cited; Carson v. Cummings, Ib. 325; Sumner v. Rogers, 90 Mo. 324. In the last case cited, it was ruled that though our code speaks of every suit brought thereunder as a "civil action," yet this extends only to the form of the action, and not to its substance. On a subsequent occasion it was ascertained that the same view had been expressed in a more amplified way by the court of appeals of New York, to the effect that notwithstanding a party may move to have the pleading of his adversary made more definite and certain, yet he is not bound to do this; that is the primary duty of the party drawing the pleading, and the latter can not cast that onus on his opponent by failing to perform his own duty in the first instance, and that duty consists in expressing his meaning clearly and unmistakably. Snyder v. Free, 114 Mo. 360; Clark v. Dillon, 97 N. Y. 370. See, also, Young v. Schofield, 34 S. W. Rep. loc cit. 499.
In short, the cases above cited recognize the doctrine that the 1 fundamental requirements" of good pleading are and must remain the same, whether under code or at common law; that is to say, a pleading- must be so drawn as to tender a definite issue or issues, and not have the adversary to grope in the dark as to what the meaning of the pleading is; "this is no more allowable now than formerly." Clark v. Dillon, supra. In the case at bar, therefore, it was misleading in pleading plaintiff's cause of action to plead an express contract, and then on the trial rely upon that as a matter of inducement, and also on "all the other facts connected with the transaction," whether such other facts accorded with the theory of an express contract or warranty or not.
3. The testimony of defendant as corrected by him, supported as it is by that of Miss Quinliven, doubtless establishes that defendant was acting only as the agent of Tom Smith, and this was communicated by him to plaintiff. If so,, then under all the authorities he can not be held liable for subsequent occurrences. Whitney v. Wyman, 101 U. S. 392; Mechem, Agency, sec. 555, and cases cited; Bank v. Gallaudet, 120 N. Y. 298; Worthington v. Cowles, 112 Mass. 30. In these circumstances, there being a conflict to some extent in the testimony, it should have been left to the jury to say whether the agency of defendant in the transaction had been made known by defendant to plaintiff.
But it seems the authorities do not go so far as to require a direct making known of the fact of the agency, etc., for in treating of this topic, it is said in a recent work of acknowledged merit, already cited: "It is material in these cases that the party complaining of a want of authority in the agent should be ignorant of the truth touching the agency. If he has full knowledge of the facts, or of such facts as are sufficient to put him upon inquiry, and he fails to avail himself of such knowledge or of the means of knowledge reasonably accessible to him, he can not say that he was misled simply on the ground that the other assumed to act as agent without authority." Mechem, Agency, sec. 546, and cases cited; Wharton on Agency, sec. 531.
Now, in this case, among the concessions made during the trial by plaintiff when testifying, was this: "Z supposed he [Tyler] was getting it [the money] for the parties whose names were on the note; I did not suppose he was getting it for himself." So that under the authorities just cited, even on plaintiff's own showing, it should have been left to the jury to say whether there was such knowledge on the part of plaintiff of the facts attendant on the transaction, or of suck facts as were sufficient to put him on inquiry, and he failed to avail himself of such facts as were either actually or else potentially known to him. Indeed, it would seem that the bare presentation of the note to plaintiff by defendant, without indorsement, would be sufficient to put ' plaintiff on inquiry as to whether defendant was the seller of the note or acting as the agent of the principal therein. And certainly the means of knowledge as to these were "reasonably accessible" to plaintiff, for a bare inquiry would no doubt have elicited from defendant in just what capacity he was acting.
4. There are cases where, if a broker sells a negotiable promissory note, and transfers it without indorsement and by delivery, without disclosure of his principal he becomes liable as principal to those with whom he deals, and will be held to an implied warranty not only of his authority to sell it, but also that the signatures of all prior parties to it are genuine. Mechem, Agency, sec. 929, citing, Thompson v. McCullough, 31 Mo. 224, and other cases. But in this case there is no charge made that defendant was the seller of the note, and if he was, and disclosed his agency, etc., he would not impliedly warrant the genuineness or value of the paper which he transferred by delivery. Tiedeman, Com. Paper, sec. 245.
5. In addition to the reasons above given, showing that error occurred during the trial of the case at bar, may be instanced the fact that the trial court gave a peremptory instruction to the jury to find for plaintiff. Such an instruction would have been erron eous even had there been no conflict in the testimony. This has been the uniform rule in this State since Bryan v. Wear, 4 Mo. 106. Vaulx v. Campbell, 8 Mo. 224; Gregory v. Chambers, 78 Mo. 294; Wolff v. Campbell, 110 Mo. 114. And the reason given in the first mentioned case was that such an instruction in effect told the jury "they must believe the evidence." Of course where, as here, there is conflicting evidence, the error of such an instruction on part of plaintiff becomes of more pronounced proportions.
Because of the errors mentioned, we reverse the judgment and remand the cause.
All concur.