John F. Clark & Co. v. Nelson

216 Ala. 199 (1927)

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Nature of the Case

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Facts

Stewart was engaged in the cotton brokerage business. Ds were engaged in like business. Stewart placed orders on his own account for cotton with D. P was a customer of Stewart, and, as a result of their cotton transactions, Stewart became indebted to P in a sum in excess of $2,000. The original indebtedness was from Stewart to Nelson, and there was no contractual relation between Nelson and D. When the orders were placed with Stewart, he then placed his own order with D and out of the consummation of the contract each received a commission. Stewart became financially involved, and called upon D for aid, and some loans were made. D went to Birmingham to investigate Stewart's business, and ascertain if further financial assistance was feasible or desirable from a business standpoint. Stewart remained open for business, but it was agreed, on account of Stewart's involved condition, that his customers, as they would come in to place their orders, should place the same direct with D in their own names. P placed a few orders resulting in a profit, which was paid him direct by D. P sued D to recover the balance due him by Stewart, upon evidence offered tending to show that D agreed with Stewart, for a valuable consideration, to pay his indebtedness to his customers, including the debt to P. D denies that such agreement was made but even if it were there had been a rescission by mutual agreement between Stewart and D before P took any action thereon. The court found for P and D appealed.