Court Opinion

ID: 8653375
Source: CourtListenerOpinion
Date Created: 2022-11-24 21:13:24.928737+00
Date Added: 2024-06-11T16:56:36.025497
License: Public Domain

Zane, C. J.,

(dissenting.)

I dissent from the judgment of the court. It appears, from the pleadings and evidence in this case, that the appellant, at the time of the transaction in question, was a corporation by virtue of the laws of the Republic of France, by the name of “Societe des Mines D’ Argent et Fonderies de Bingham,” and that it was working the Old Telegraph mine, situated in Utah; that it appointed F. Medhurst its commercial agent to conduct the financial business of the mine, and sent him here; that appellant’s account at the bank, and other business transactions, were in the name of “F. Medhurst, Commercial Agent,” or some abbreviation thereof, and that one Cohen was general manager of the mine, and M. C. Fox was appellant’s book-keeper, acting under the direction of Medhurst. It also appears from the evidence that defendant, Mackintosh, was engaged in business in Salt Lake City, and as an ore sampler in the usual course of his business, received and sampled the Old Telegraph ores shipped to him, paid the back freight, and sent in his bills, and received checks on Mc-Cornick & Co., bankers, and in that way he received payment. . It appears, further, that Medhurst was also doing-business for himself and on his own account; that in one transaction, unconnected with the business of plaintiff, the defendant paid him about $10,000 as his share of the proceeds, and that defendant had great confidence in the financial ability, business capacity, and integrity of Medhurst, although he had never known him until he took charge of the appellant’s business, nearly three years before the note sued on was given. Under these circumstances, it appears, Medhurst called at defendant’s office during business hours, and said to him, as defendant testified, that he wanted defendant to do him a favor; that Cohen, "Watten-wiler and himself had been negotiating- for the Hecla mine in Montana; that the expenses of the negotiation amounted *581to $7,000; and that be wished to borrow defendant’s note for that amount for himself. Defendant testified that he knew all three of the men, and had confidence that Med-hurst was telling him the truth; that defendant went to Medhurst’s office with him, and had some conversation with respect to the matter, in which Medhurst said that he would give his note to defendant in exchange, and a letter explaining the transaction; that the notes and the letter were then signed and delivered. They are as follows:
“3rd February, 1882,
Salt Lake City, Utah.
“Six months after date, for value received, I promise to pay to F. Medhurst, Commercial Director, or order, the sum of seven thousand dollars ($7,000) together with interest at the rate of ten (10) per cent, per annum.
E. Mackintosh.”
“3rd February, 1882,
Salt Lake City, Utah.
“Six months after date, for value received, I promise to pay E. Mackintosh, or order, the sum of seven thousand dollars, ($7.000), together with interest at the rate of ten (10) per cent, per annum.
“F. Medhubst, Com.”
“3rd February, 1882,
Salt Lake City, Utah.
“My Deab Mackintosh:
The object of the present is to state that you have this day given me, as a personal obligation to myself, your note of $7,000, payable in six months, together with interest at rate of ten per cent, per annum, and not for value received, said note being given in exchange for one of mine of like amount, term, and interest; and I hereby pledge myself not to discount or in any way make use of your said note; and thank you for the favor conferred,
F. Medhubst.”
*582The first note is the one in suit, and the defendant testifies that it was given to Medhurst as an accommodation to him, that the second note was given as a memorandum to be held until the first should be returned, and that the above letter states the transaction truly. Fox testified that Medhurst gave the note sued on to him, and told him to put it in the safe, and not to negotiate it; that he put it in an envelope by itself, and then in a drawer in the safe. Medhurst’s private papers and the company’s papers were in the same safe, and no other delivery to defendant is shown. Nearly two years afterwards demand of payment was make on defendant. The note was found in the safe after Medhurst had left the country. The main question in issue is, was Medhurst the payee of the note, or was the corporation the payee? The name of the plaintiff does not appear in the note. Medhurst is payee on its face; and in the absence of proof of extrinsic facts, the court could hold the words “commercial director” descriptive only: Moss v. Livingston, 4 N. Y., 208. Therefore the plaintiff was compelled to resort to extrinsic evidence, and to assume the burden of proof, in order to show that it was the payee ;and the defendant was required to furnish evidence only to meet this, and to support the legal effect of the terms of the note. The note was found in an envelope by itself. It is true that it was in defendant’s safe; but Medhurst’s private papers were also there, so that the place where the note was- found affords no inference of ownership. It is true, also, that the entries made in plaintiff’s books indicate that defendant at different times had borrowed of plaintiff sums of money amounting to $7,000, and that the note sued on was given to secure that sum; but the evidence shows beyond all question that defendant never borrowed any money of the plaintiff, and that the entries were made by Fox, under the direction of Medhurst, without any knowledge on the part of Fox, and without the knowledge or consent of defendant. These entries are explained by the fact that Medhurst, as the agent of the plaintiff, had used $7,000 of its money on his own account, and that he was expecting an inspection of the books he was keeping by a representative of the *583company from France, and be desired that the books should show that some responsible man had the money, instead of himself. The conclusion from the evidence is irresistible that the entries on the plaintiff’s books were false and fraudulent, and that defendant had no notice that Medhurst was overdrawn.
. It is claimed, also, that the $1,500 check was a part of the transaction in which the notes were exchanged and the letter was given. The check is as follows:
“No. 2776. Salt Lake City, Utah.
February 4, 1882.
McCornick & Co., Bankers, Salt Lake City, Utah.
Pay to the order of Bichard Mackintosh, fifteen hundred dollars, ($1,500.) .
F. Medhubst, Com. Dir.”
This check bears date February 4, 1882, and its stub, produced by Fox, shows that the check was given on that day, and a deposit of it by Medhurst was made on the same day, as is testified to by Dooley, and as is shown by the deposit ticket, and the books of Wells, Fargo & Co.’s bank. The bank was near the place of the transaction, and it is probable that the deposit was made on the day the check was given. All of these dates indicate that the check was given on the 4th, and the dates on the notes exchanged and the letter are all on the 3d. Fox says, in answer to the question, “When was it you first saw this note of $7,000 as book-keeper of the company?” “I saw it, I think, the day after it was made — on the 4th of February.” To another question, he answered: “He gave it to me, and told me to put it in the safe, and it was not to be negotiated.” To the question, “Do you remember the' transaction in which this note was given that is sued on?” He answered: “No, sir; I don’t remember only as it is indicated on the books.”
After defendant had stated the transaction in his testimony without mentioning the check, he stated further, Medhurst “told Fox in my presence, and I repeated it *584afterwards, that that was bis personal property, not to be negotiated in any way; that it was not to go on the ontside. It was simply an accommodation for him, in connection with this transaction, that he had told me about up in Montana — this Hecla mine. The transaction was all concluded there. When he turned, he had given Mr. Fox the order about a check, and until this morning I didn’t know exactly what the amount of that check was. He passed the check over to me on the other side of the table where I was. Says: Here, Mack., endorse that check.’ I supposed it was on the transfer of the account, whatever he was doing, which I had no reason to doubt. I signed my name on the back of it, and left the check with him.” In answer to another question, defendant said that he knew that he was giving a note to .F. Medhurst for the sum of $7,000; and, in answer to the further question, “Hid you notice the words ‘commercial director’ at that time?” said: “If I did, I took no notice of it. It had no import to me, and I never knew it until I saw the note in Mr. Marshall’s hands, the attorney.” It is quite clear that. the defendant’s recollection of the check for $1,500, and that transaction is very slight. That he indorsed it is shown by his name on it; and it also appears, from Med-hurst’s account at the bank, that Medhurst got the money on it, while defendant got nothing. It is plain from the evidence, when carefully considered and weighed, that the note sued on was given on the 3d of the month, and the check was drawn on the 4th. But if it were conceded that the check transaction took place on the 3d, and immediately after the two uotes for $7,000 had been exchanged, and the letter had been given as defendant stated, still it does not appear that the check was a part of the note transaction. The check was not taken into consideration in that transaction. It does appear that the one was no part of the consideration of the other. They were separate and independent transactions. It will not do to say that one contract is a part of another simply because one immediately follows another. In order to make the one a part of the other, they must depend in some way upon each other. It is claimed that defendant made himself liable *585to plaintiff by indorsing the $1,500 check; that, by so doing, be enabled Medhurst to obtain from plaintiff that amount. But it is plain that the indorsement of defendant on the check was not necessary to enable Medhurst to receive money from his principal. He was its financial agent, and received and paid out its money. The truth is, as the evidence shows, that he wished the books of the company to indicate to another representative of the plaintiff, whom he expected would examine them, that the money he had used was loaned out. But the evidence does not show that any such agent examined the books, and was misled by the indorsement of the check in question, or that any such agent ever knew of it until after Medhurst had fled from the country. The appellant never lost anything by relying on the check transaction. It never, by acting on the apparent credit, lost any right that it ever had. Therefore-it cannot be heard to say that defendant’s indorsement of the check was a fraud upon it, or that defendant is estopped from showing that the transaction was a mere accommodation, without consideration, and that its collection would be a fraud upon him. He is not estopped from showing the truth. The plaintiff has not sued upon this check, nor does it rely upon fraud. If so, it should have set up the fraud in its complaint. The appellant simply relies on the note for $7,000. The foregoing is the evidence relied upon to show that the note sued on was given to the plaintiff. When carefully examined and weighed, as we have seen, this evidence should receive but little weight.
We now come to the consideration of the evidence in support of the position that the note sued on was given to F. Medhurst personally. The note given in exchange for this note was Medhurst’s personal undertaking. This fact furnishes a very strong presumption that the note he received in exchange was his own. In Bank v. French, 21 Pick., 486, 82 Amer. Dec., 280, the court say: “The principle is that the promise must be understood according to the intention of the parties. If, in truth, it be an undertaking to the corporation, whether a right or wrong name, whether the name of the corporation or some of its *586officers be used, it should be treated as a promise to the corporation. And there is no so safe criterion as the consideration. If this proceed from the corporation, it raises a very strong presumption the promise is made to it. If no express promise be made, but it be left to legal implication, it must be to it.” In that case the note was made to the cashier of the Commercial Bank, Boston. Therefore, if this cross-note be a consideration, it only supports the other positive proof that the note in suit is made to Med-hurst, who gave this consideration; and, if there was no evidence of the intention, the presumption would be that the payee is he who gives the consideration. In fact, the note is without pecuniary consideration. And even in this view the defendant gets the strength of the legal inference referred to by the court above; for in such case the inquiry, who did the maker intend to favor? takes the place of a valuable consideration; and the proof clearly shows defendant intended to favor Medhurst. In his letter to the appellee at the time the note in question was delivered, Medhurst stated that defendant had given, as a personal obligation to himself, the noté of $7,000, and that it was given in exchange for one of his of like amount, etc. This would appear to be conclusive upon the question. It certainly should be so regarded as against any false and fraudulent entries made on the books of the company without defendant’s knowledge or consent. In addition to this, the defendant was a witness in the case, and he testified that the note was given to Medhurst as an accommodation to him, and without any consideration. His testimony is very explicit and clear, and he is corroborated by appellant’s book-keeper, Fox, who certainly could have no motive, so far as appears from the evidence, to give false testimony. That this note in suit ivas given to Med-hurst, and that he was the payee, is certainly established by the great preponderance of the evidence. The appellant selected and sent to Utah a man who was a stranger here to manage a large business. By this act it commended, him to business men, and vouched for his integrity. The defendant dealt with him, and believed his representations, and the appellant now insists on taking *587advantage of a gross fraud practiced upon tbe defendant by its agent to take tbis large sum of money from bim without any consideration whatever.
I am of tbe opinion that tbe court below was right in finding that tbe note in suit was made and delivered to Medhurst personally for bis accommodation, and without consideration.