Court Opinion

ID: 5200445
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:51:14.620665+00
Date Added: 2024-06-11T08:27:11.452269
License: Public Domain

Houghton, J.:
The most difficult question involved in this case is the interpretation of the cablegram on which the plaintiffs paid the money to the defendants.
The request to plaintiffs by Lurman & Sohn was to pay to defendants $35,000 “for account of Garbrecht,” which was done and a receipt taken from defendants stating that the payment was so made and received. If the cablegram must of necessity be construed as a request to pay the money for Lurman & Sohn and on their account and credit, irrespective of whose debt it liquidated or who had the benefit of it, then, manifestly, Lurman & Sohn alone are liable and no cause of action exists against those defendants. If, on the other hand, as insisted by plaintiffs, the cablegram can be legitimately construed as a request by one foreign house to place this sum of money with defendants to the credit of Garbrecht & Co., another foreign house, presumptively upon authority and by direction of Garbrecht & Co., then, it seems to me, the plaintiffs proved a good cause of action.
I am inclined to adopt this latter interpretation. Both foreign houses were known to plaintiffs. They knew nothing of the dealings between the defendants and Garbrecht & Co., or between Garbrecht & Co. and Lurman & Sohn. Presumably, Garbrecht & Co. had arranged with Lurman & Sohn to have deposited *524with defendants a sum upon which they could draw, or with which they- could deal in the ordinary course of international business. This is the fair" meaning of the direction to pay or place “ for ' account of Garbrecht.” If in fact Garbrecht & Co. had made no arrangements with Lurman & Sohn to so place the money to their credit with defendants and had not authorized it to be done, then the plaintiffs' paid over the money under a mistake. Garbrecht & Co. had not made any such arrangement and had only demanded that Lurman & Sohn pay their own debt to the defendants. If Lurman & Sohn did not pay this debt, Garbrecht & Go. under their guaranty must do so. Garbrecht & Co. have, therefore, had the benefit of the money paid by plaintiffs to defendants under a mistaken idea as "to the situation, and the money has gone to lessen Garbrecht. & Co.’s obligation to the defendants.
If, therefore, the plaintiffs were justified in assuming from the" cablegram that they were to pay over the money to defendants • because Garbrecht & Co. had authorized Lurman & Sohn to have it done, the situation comes to this, that Garbrecht & Go. repudiate the acts of a person wh.o plaintiffs had a right to assume was acting for them, and still insist, through defendants, upon keeping the fruits of his unauthorized act.
Unless defendants have the right to keep tlie money because it was paid on a debt due from Lurman & Sohn to them, they are a mere depository for the benefit of Garbrecht & Co., and so far as plaintiffs are concerned that relation is not changed by the fact that Garbrecht & Co. -were their contingent debtors and liable for the debt' if Lurman & Sohn did not pay. Occupying this position defendants’ rights are dependent on the attitude of Garbrecht & . Co. That attitude is that they gave no authority to Lurman & Sohn to pay the money on any such account or state of facts as plaintiffs were authorized to believe that the cablegram directed .to be done. They cannot repudiate the authority which" brought the money to them and still keep the money. It is no answer to say that there was no mistake on the part of the defendants and Garbrecht &■ Co., and that they fully understood how the money was paid. Accepting the money when no authority existed for its payment, or keeping it after" repudiation of the authority tinder which plaintiffs were justified in believing it was paid, is a *525fraud; and mistake on one side and fraud on the other is sufficient ground for recovery back. ’ .
The situation is not one where money is obtained by false pretenses or theft, and paid over by the thief to liis innocent creditor.; The harsh rule of law with respect to stolen money, adopted from necessity because money cannot be traced, and to insure stability in business transactions, does not apply. ¡None of the parties to the transaction committed a larceny of the money, and neither Garbrecht & Co, nor Lurman & Solin ever obtained actual possession of it and then paid it over to defendants on their debt. The transaction discloses a simple commercial misapprehension and business mistake; The office which the money performed was to pay the ultimate debt of the guarantors, Garbrecht & Co. So far as plaintiffs are concerned, it is a mere question of payment under mistaken authority, and Garbrecht & Co. must acknowledge that it was done by their áuthority or else be deprived of the accruing benefit.
The position of defendants has not- been changed for they still have the guaranty of Garbrecht & Co. if they are compelled to refund the money to plaintiffs.
I think the exceptions should be overruled, and judgment directed in favor of plaintiffs.
Scott, J., concurred; Ingraham and Laughlin, JJ., dissented.