McPhee & McGinnity v. Fowler

Mr. Justice Steele delivered the opinion of the court: McPhee & McGinnity, lumber dealers in- Denver, and W. W. McAlpine, who was operating a saw mill in New Mexico, were dealing with each other under a contract, by the terms of which McAlpine was to manufacture and sell to McPhee & McGinnity the — 203 — lumber produced at McAlpine’s mill, and McPbee & McGinnity were to buy, at a stipulated price, all the lumber produced by McAlpine. During the month of June, 1893, certain orders, on McPhee & McGinnity were drawn by McAlpine and purchased by Fowler & Company, the appellees. These orders were O. K.’d by the-representative of McPhee & Mc-Ginnity at the McAlpine mill, and the orders were thereafter sent to the firm in Denver. Checks were drawn for the amount of each order, and the amount charged to McAlpine’s account. Payment, was stopped on the checks, and the orders were never paid. The firm of Fowler & Company brought suit in the district court' of Arapahoe county upon these orders, and the trial resulted in a judgment for the defendants. Upon review, the court of appeals reversed the judgment, the case being reported in 13 Colo. App., page 185. Upon the second trial, a judgment was rendered in favor, of the plaintiff for the sum of $1,754.95, from which judgment the defendants appealed to the court of appeals. The defendants admit that they gave McAlpine authority to draw orders, but contend that a condition was attached to the agreement, and that McAlpine failed to perform the terms of .the agreement. The testimony of J. J. McGinnity, with whom the agreement concerning these orders was made, presents the defendants’ version of it. Mr. McGinnity’s testimony upon the subject of the agreement is set out in the abstract as follows: “I saw Mr. McAlpine at our office on the morning of June 19th. He asked for a statement of his account, and I had one prepared and gave it to him, showing the balance of $845.40. He told me he would have to have more money before g’oing- home. He said the account was all right, but there was not money enough to pay his bills. I told him we could — 204 — not advance him any more money, and gave him a check for the amount due, $845.40. He said he would have to have more money before going home; that he was owing his men about twenty-seven or twenty-eight hundred dollars, and other bills for supplies to the mills approximating two thousand dollars, and that, unless he could pay his men, they would not continue to work, and he could not run the mill. I told him that we did not have any money to loan; that money was very hard to' get. I explained that to him, but, if he would come around in the afternoon, I would, in -the meantime, talk to Mr. McPhee, and see what was best to do’. That was the substance of the conversation. In the afternoon, he came and made the statement to us that he could not continue to' operate the mill, and his men would not work, unless he got this money, and he would have to have at least $2,500.00’ in addition to the amount of the check that he got in the morning, in order to continue to operate his mill. I explained to him that it was very necessary for him to operate the mill, on account of the contract which he had with The Maxwell Land Grant Company, to1 which we were parties; that the mill had to' be- operated. He assured us that if he had this and could pay his men one-half, he was satisfied they would continue to work; if he- could pay his men half of what he was owing, and could pay part of his other bills, he was satisfied he could continue operating his mill, and we finally consented that, if he was sure he could do this, we would advance to him the $2,500.00, provided he would return the $845 check, so that we would know the money was applied to paying the men or paying for supplies; instead of taking the cash, he would give orders on us for the amount. And we further stated that we did not want the money which we advanced to be applied to paying the men who' worked for the — 205 — Smith and McAlpine, or the Red River mill, as we knew it, and, in order that that should not be done, we asked him to have our man, who was loading lumber there, to make a notation on the orders he gave for paying labor, that this man worked for McAlpine at his plant, at the mill that was supplying us with lumber. He said he had no objection to having that-done, and I told him we. would advise our lumber loader, Mr. Gibson, down there, to make a notation on the orders, so that we would know the money went to paying men who worked at the mill that supplied us with lumber. 'That is the substance of it. He said he was satisfied that, if he got this amount of money, which was about half of what he owed, he could arrange to keep the mill running. It was upon that condition that the money was advanced.” On cross-examination, McGinnity said: “Mr. McAlpine assured us that, if we would advance the money, that he could make arrangements with his men to operate the mill; that if he did not get this money, he could not do it. We told him that we would advance it to him upon that assurance. Nothing was said as to the quantity of lumber he was to manufacture, nor as to the number of days he was to run the mill; he was simply, to run the mill according to the general .contract. Mr. McAlpine deposited this check with us before leaving our office, and about the same time we charged up the interest against him; that was five per cent, on twenty-five hundred dollars. When Mr. McAlpine left our office, everything had been agreed upon by us with reference to this arrangement, and he left.the office with full authority to draw the orders. I am not sure that I remained in Denver until any of the orders came in that were drawn under the arrangement by Mr. McAlpine. We paid them promptly on their presentation. We trusted Mr. McAlpine with regard — 206 — to running the mill. The checks will show that the amount of orders paid under, the agreement was $1,413.73.” The letter sent by McPhee & McGinnity to E. A. G-ibson, their representative at Catskill, New Mexico, is copied into the abstract as follows: “Denver, Colo., June 21st, 1893. “E. A. Gtibsoh, Esq., Catskill, New Mexico. “Dear Sir: Mr. McAlpine will probably give orders to some of his men on us, besides what he may pay them. Any orders that he asks you to O. K., you will note the same memorandum on that you did last time: ‘ This man worked for McAlpine at his mill. ’ “You understand our reason for this is, that we dp not want to pay any men except those working at the mill from which he supplies us with lumber. The only reason we ask him to give orders is, that if he got the cash, he might pay Red River men instead of the men.he should pay. "We áre in no way responsible for the men’s wages, directly or indirectly. “You need not say anything to anybody about this. Simply write on the order as -you did before if you are asked to. “Yours truly, “McPi-iee & McGiitnity.” We shall not consider the assignments of error relative to receiving- and refusing’ to receive testimony, for the reason that the abstract contains no objection nor exception to the ruling of the court. The abstract contains the evidence in the narrative form, and the questions and answers and the ruling of the court upon objections to testimony are not given. True it is that in the assignment of errors the questions and answers are given, and the state — 207 — ment is mad© that the testimony was received over the objection of the defendant; and we are r'eferred to the bill of exceptions.1 Bnt the rules of the court require that the abstract shall show the objections and the rulings thereon and the exceptions taken thereto. Nor shall we discuss the other assignments of error, for the reason that we are of opinion that, upon the defendants’ testimony, the plaintiff is entitled to recover. We do not regard the condition claimed by the defendants as such a. condition as will defeat the plaintiff’s right of recóvery, and we agree with the court of appeals in its opinion given at the time the case was before that tribunal, when it says: “The condition annexed to the agreement would not relieve them, even conceding its existence. What the rule would have been had McPhee & Mc-Grinnity been advancing their own money, or what the rule would have been if it was determined that they would suffer loss by the acceptance and payment, we need not determine. The drafts were really drawn by an authorized agent on his own funds and were a' specific appropriation of these funds to the payment of the bills or orders which he drew. MePhee & McGrinnity had no right to stop the payment of the checks which they had sent to pay these orders. The orders were drawn with authority and under the promise of the drawees ; they had been bought by Fowler and Underwood on the faith and strength of that promise # * * and before any breach of the condition and before any right to rescind had accrued.” McAlpine left with McPhee & McGrinnity the sum of $845.00; he was charged with the sum of $125.00, being five per cent of $2,500, the rate they charged for the use of the money? for one month. The letter written by the firm to their representative in — 208 — New Mexico directed him to O. K. the orders and to make a memorandum on the orders, “This man worked for McAlpine at his mill, ’ ’ and stated: “Yon understand our reason for this is that we do not want to pay any men except those working at the mill from which he supplies us with lumber. The only reason that we ask him to give the orders is that if he got the cash he might pay Red River men instead of the men he should pay. ’ ’ These orders were all indorsed', as directed, by the representative of McPhee & McG-innity. They were charged cto McAlpine’s account. Checks were drawn and sent to New Mexico for the purpose of paying them; payment of the checks was stopped, but the orders were never returned. We find no prejudicial error in the record which would warrant us in disturbing the verdict. The judgment is therefore affirmed. Affirmed. The Chief Justice and Mr. Justice Campbell concur.