National Bank v. Lee

At the trial of this case in the court below, the judge in effect instructed the jury that under the contract, a copy of which appears in the official report, the bank ivas liable to account to W. P. Lee for the full amount of the contract price of all ties shipped by him to Wheelwright & Co.; that it Avas the right of the bank, under the terms of this contract, to first satisfy its claims for all advances of money made to Lee, and, if there should be anything left from the price of the ties, then that Avould be coming to Lee from the bank, and he could maintain his suit for the recovery thereof. The court refused to give in charge to the jury a number of written re. quests presented by counsel for the bank, to the effect that the purpose of this contract, so far as the bank was concerned, Avaa merely to secure it for money advanced to Lee to enable him to manufacture cross-ties to be shipped to Wheelwright & Co., .and, to this end, to vest in the bank the legal title thereto, .simply to secure it in making such advances; and further, that the bank was not bound to account to Lee for the full .amount of the contract price of all the ties shipped to Wheelwright & Co., but only to properly, honestly, and accurately account to Lee and pay to him all money actually received by the bank from Wheelwright & Co. on account of ties delivered to them, after deducting whatever sum or sums Lee was indebted to the bank for sums advanced to him. The case turned mainly upon the construction to be given this contract. If that placed upon it by the court was wrong, there should be another hearing. We are of the opinion that the true intent and meaning of the contract Avas that indicated in the first headnote. To hold otherAvise would be to make the bank an-absolute purchaser of the ties, and this certainly was never in the contemplation of the parties. On the other hand, this contract shows a manifest intention on the part of Lee to sell the ties to Wheelwright & Co. on credit, trusting to the solvency and hon*225esty of this firm for payment. The only interest the bank had in the matter was to secure to itself the repayment of whatever sums it might advance to Lee in order to enable him to carry on his business. It can not, we think, be fairly gathered from the terms of the contract that the bank undertook, in any manner, to guarantee payment for the ties by Wheelwright & Co. On the contrary, it required that the full amount of the price of .these ties should be paid to it, and that it should hold title to the same until paid for, simply as a matter of security to itself. From the very nature of the business, it was essential that the bank should do this, for it was contemplated that it would be constantly making advances to Lee, and that all the proceeds of the ties should pass through its hands in order that it might at all times have under its control a fund for its reimbursement. Clearly, the bank was not the agent of Lee in the sense that it was bound to represent him with reference to disputes arising between him and Wheelwright & Co., as to whether or not the ties came up to specifications, or as to other matters upon which Wheelwright & Co. might base a claim for a reduction of the contract price. Of course, the bank was accountable to Lee for every dollar it actually received over and above the amount of its advances, and it was also bound to exercise the utmost good faith in collecting from Wheelwright & Co. all sums for which they were confessedly indebted to Lee on account of ties shipped to them. If the bank collusively permitted Wheelwright & Co. to ship ties from the port óf Brunswick without paying or accounting for, the same at all, it would doubtless be liable to Lee for whatever loss might thus be occasioned to him; but as long as it in good faith itself observed and endeavored to carry out the terms of the contract as we have herein construed it, the bank would not be liable to account to Lee for more than it actually received.

We will not discuss the -case as made by the evidence, nor deal further with the questions presented in the record. It •would hardly be profitable to do-so, for the reason that because of. the fundamental error of the'court in construing the contract above referred to, the case was tried upon an entirely erroneous theory. Let the next trial be had in the light of what *226is here laid down as the true intent and meaning of the contract which forms the basis of the plaintiff’s action.

Judgment reversed.